GOLD    AND    SILVER 

AS  CURRENCY 

IN  THE  LIGHT  OF  EXPERIENCE,  HISTORICAL 
ECONOMICAL,    AND    PRACTICAL 


^  0cne0  of  Paper6 

WRITTEN    FOR   THE    TRAVELERS   RECORD 

HV 

JAMES  G.  BattersON,  President 

or 

THE  TRAVELERS  INSURANCE  COMPANY 

HARTFORD,    CONN. 


1896 


HARTFORD,  CONN, 
press  of  Zbe  Case,  locftwoo^  &  3Bra(nar^  Compan? 

1  896 


Ht 


3£ 


GOLD   AND    SILVER 


THE    WORLD'S    EXPERIENCE  —  ECONOMICAL,    HISTORICAL,    AND 

PRACTICAL. 

I^^^HE   economic   questions  of   the  day    are   a  thousand 
^"'^     times  more  important  to  the  welfare  of  the  people 


at  large  than  any  partisan  interest  which  they 
,^-  may  have  in  the  distribution  of  political  patronage.  It  is 
^i  not  the  time  for  experiments  with  theoretical  fancies  which 
would  set  aside  the  experience  of  centuries ;  and  it  behooves 
every  thinking  man  to  cling  to  that  which  he  knows  to  be 
^  practical,  rather  than  follow  those  visionary-schemes  which 
'■^  can  only  promise  success  at  the  end  of  a  rambow. 

The  electric  telegraph,  swift  ships,  and  modern  inven- 
'  tions  of  every  description  have  brought  all  nations  so  close 
together  that  we  can  no  longer  ignore  the  claim  which  each 
has  upon  the  industries  of  the  other.  The  products  of 
American  industry  are  everywhere  to  be  found,  and  the 
United  States  is  a  large  consumer  of  the  products  of  all 
other  countries.  /This  universal  barter,  which  is  the  distri- 
bution of  the  surplus~abundance  of  one  country  for  that  of 
another,  makes  up  the  principal  volume  of  the  world's  com 
merce,  and  is  the  great  force  in  the  civilization  of  mankind. 
The  productions  comprised  in  this  universal  barter  or  ex- 
change have  all  to  be  weighed  and  measured  in  order  that 
justice  may  everywhere  be  done.  There  is  as  yet  no  uni- 
versal standard  either  of  weights  or  measures,  but  the  stand- 
ards of  each  country  are  within  very  small  limits  convertible 
into  the  standards  of  all.  The  adjustment  of  the  final  balance 
in  all  transactions  of  barter  is  by  a  payment  in  coin  which 
measures  the  difference  in  values  at  the  point  where  the 
exchange  is  made. 


386383 


The  division  of  labor,  also,  not  only  between  the  states 
and  the  peoples  of  a  single  country,  but  between  the  nations 
of  the  earth,  is  the  highest  type  of  universal  civilization. 
The  exchange  of  products,  skilled  labor,  and  inventions 
being  the  substance  of  commerce,  is  the  bond  of  social  inter- 
course both  at  home  and  abroad.  Every  impediment  in  the 
way  of  building  up  our  own  commerce  and  extending  our 
trade  with  other  nations  is  a  hindrance  to  the  progress  of 
civilization  and  a  hindrance  to  the  payment  of  our  just 
debts,  which  can  only  be  paid  with  our  own  products  and  the 
thrift  of  our  own  people.  England,  France,  Germany,  and 
Holland  have  purchased  our  securities  with  gold  :  we  cannot 
legislate  their  payment  in  silver.  By  the  full  amount  of  our 
foreign  indebtedness,  we  are  now  under  bonds  to  preserve  a 
gold  basis  with  those  countries,  and  we  cannot  change  it 
until  we  pay  our  debts,  and  then  we  will  not  want  to.  De- 
stroying our  credit  is  a  very  poor  way  to  pay  debts. 

Before  the  Civil  War  "cotton  was  king,"  and  supplied  a 
larger  volume  of  exchange  on  London  than  any  other  pro- 
duct in  this  country.  When  the  writer  was  in  Egypt  in  1859 
cotton  was  a  very  scarce  commodity  in  the  port  of  Alexan- 
dria; now  every  mill  in  New  England  and  old  England 
buys  Egyptian  cotton,  and  cheap  labor  in  the  valley  of  the 
Nile  and  in  India  affects  the  great  staple  of  our  Southern 
States  unfavorably.  We  cannot  prohibit  its  importation 
without  promoting  increased  cultivation  in  Egypt  and  India. 
The  Soudan  is  the  natural  cotton  country  of  the  world,  and 
it  is  larger  than  the  United  States.  England  has  long  been 
reaching  out  for  that  prize  and  will  get  it  soon. 

These  economic  questions  cannot  be  controlled  by  legis- 
lation, any  more  than  we  can  force  the  cultivation  of  tea  and 
coffee  in  Colorado  and  Montana.  The  silver  miners  in  those 
States  get  from  $3.50  to  $4.00  per  day  for  their  labor ;  the 
Egyptian  fellaheen  are  content  to  raise  cotton  for  a  mere 
fraction  of  such  wages,  where  food,  shelter,  and  clothing 
cost  little,  and  being  deprived  of  the  last  would  not  cause 
them  to  suffer. 


5 

The  world's  supply  of  cotton  is  so  large  that  the  foreign 
demand  on  the  Southern  States  has  fallen  off,  and  this  great 
industry  of  our  country  has  suffered  seriously  in  consequence. 
Cultivators  of  wheat,  corn,  and  tobacco,  with  all  other  indus- 
tries, have  experienced  the  same  loss  of  demand  for  their 
products,  and  the  values  have  been  greatly  diminished. 

The  silver  producing  States  have  had  a  like  experience  in 
loss  of  demand  for  their  product,  but  they  now  ask  their  sis- 
ter vStates  to  join  them  in  creating  such  an  artificial  demand 
for  the  silver  product  as  will  give  it  an  advantage  over  all 
other  products,  which  in  turn  would  reap  no  corresponding 
benefit,  but  on  the  contrary  would  find  the  gain  to  silver  an 
additional  burden  to  themselves. 

The  theory  that  silver  can  be  coined  into  money,  and 
that  the  mint  stamp  can  arbitrarily  fix  its  value,  and  thereby 
make  money  plenty  for  everybody,  is  founded  on  the  theor}^ 
proposed  for  the  relief  of  all  who  are  suffering,  not  from 
any  "scarcity  of  money,"  but  a  diminished  demand  for  their 
products. 

The  fallacy  of  attempting  to  create  an  additional  value  by 
the  mere  stamp  of  the  mint  is  demonstrated  by  the  fact  that 
the  present  difference  between  the  nominal  value  of  the 
silver  dollar  coined  under  the  acts  of  1878  and  1890,  and  the 
market  value  of  the  same  as  bullion,  is  just  about  $200,000,000 
which  the  people  at  large  have  had  to  pay  or  must  pay,  as 
the  measure  of  relief  already  given  to  the  producers  of  silver 
in  this  country.  The  same  proportionate  expenditure  for 
sustaining  the  prices  of  cotton,  wheat,  corn,  tobacco,  and 
potatoes  would  have  bankrupted  the  government.  The 
citizen  who  digs  potatoes  and  the  citizen  who  digs  for  silver 
should  have  the  same  measure  of  protection,  or  both  should 
be  left  to  the  natural  laws  of  supply  and  demand. 

Further  demonstration,  if  needed,  is  found  in  the  his- 
torical and  practical  experience  of  all  countries  and  all  ages 
with  the  commercial  relations  of 


GOLD   AND   SILVER    COINAGE. 

Both  of  the  metals  named,  when  extracted  from  their 
native  ores  and  remaining-  in  bulk,  are  termed  bullion.  After 
refinement  and  admixture  with  the  legal  proportion  of  alloy 
to  secure  hardness,  it  is  called  standard  bullion. 

Charlemagne  was  the  first  to  establish  a  pound  weight 
of  silver  as  the  unit  of  value.  The  same  unit  was  subse- 
quently adopted  by  England,  France,  and  Italy,  and  it  be- 
came by  its  multiples  and  sub-multiples  the  foundation  of 
the  English  nomenclature,  pounds,  shillings,  and  pence,  and 
assumed  the  function  of  money  as  a  convenient  measure  of 
value  in  exchange  for  all  other  commodities.  The  single 
pound  of  standard  bullion,  divided  into  twenty  equal  parts, 
made  twenty  shilling  pieces,  each  weighing  one-twentieth 
of  a  pound.  Divided  into  four  pieces,  each  weighing 
one-quarter  of  a  pound,  they  were  called  crowns.  Two 
shillings  sixpence  was  half  a  crown,  a  sixpenny  piece  weighed 
six  two-hundred-and-fortieths  of  a  pound,  or  a  pound  divided 
into  forty  equal  parts. 

Edward  I.  changed  the  ratios  slightly  by  coining  243 
pence  out  of  the  silver  pound.  Up  to  the  time  of  Elizabeth 
repeated  changes  had  been  made  until  they  reached  744 
pence  to  the  pound  of  silver,  making  sixty-two  light  shil- 
lings where  there  was  only  twenty  by  the  original  standard. 

During  the  reign  of  Charles  II.  the  English  African 
Company  sent  home  a  large  quantity  of  gold  from  the  coast 
of  Guinea.  Charles  coined  this  gold  into  pieces  which  he 
called  guineas,  and  were  intended  to  conveniently  represent 
the  silver  pound  in  value.  By  the  bullion  values  in  the 
markets  of  different  countries  it  was  found  that  the  guinea 
was  worth  20^-.  8^/.  as  compared  with  the  relative  value  of 
a  pound  of  silver;  but  the  government  declared  it  to  have 
the  current  value  of  twenty-one  shillings  silver,  and  both 
gold  and  silver  were  made  legal  tenders  to  any  amount. 
For  this  reason  debts  could  be  paid  more  profitably  in  gold 
than  silver,  as  it  had  a  legal  tender  value  of  ^d.  in  the 
pound  over  silver,  which  being  depressed  at  home  was  sent 
abroad,  under  the  operation  of  Gresham's  economic  law. 


In  1816  o-old  was  declared  to  be  the  only  measure  of 
value  to  an  unlimited  anioimt,  and  the  gold  sovereign  was 
struck  to  represent  the  value  of  twenty  shillings  in  silver, 
or  the  pound  unit.  This  gave  silver  an  artificial  value  of 
about  six  per  cent.,  and  was  likely  to  drive  the  new  sov- 
ereign out  of  circulation,  but  the  mischief  was  averted  by 
limiting  the  legal  tender  in  silver  to  forty  shillings. 

Aristophanes  was  the  first  to  discover  that  a  base  or 
depreciated  coinage  always  remained  in  circulation,  while 
the  better  coins  immediately  disappeared  from  the  markets. 
The  same  fact  has  been  noticed  by  careful  observers  ever 
since,  and  it  has  become  a  well-settled  economic  law.  The 
reason  is  obvious  :  if  coins  of  full  weight  and  value  are 
allowed  to  circulate  with  those  which  are  depreciated,  the 
bad  will  remain  and  the  good  will  disappear  ;  for  every  one 
will  try  to  pay  his  debt  with  the  depreciated  coin,  while 
those  of  full  weight  will  go  to  the  money-changers  in  ex- 
change for  coins  of  the  same  legal  value  but  of  less  real 
value,  and  thus  make  a  profit  by  withdrawing  the  best  cur- 
rency from  circulation. 

The  United  States  trade  dollar,  which  was  7^  grains 
heavier  than  the  ordinary  dollar,  was  coined  for  inter- 
national circulation.  The  ordinary  or  light  dollar  was  a 
legal  tender,  but  the  trade  dollar  was  not  ;  the  consequence 
was,  the  trade  dollars  were  all  exported  and  never  came 
back,  being  worth  more  as  bullion  than  as  dollars. 

In  this  connection  the  variable  character  of  the  ratios  at 
different  historical  periods  is  worthy  of  attention.  Herodo- 
tus gives  it  as  i  to  13,  Plato  i  to  12,  Menander  i  to  10,  and 
in  Caesar's  time  it  was  i  to  9.  From  1663  to  17 17  silver  was 
the  standard  of  value  in  England,  and  gold  passed  at  its 
market  value  only,  but  the  guinea  was  sometimes  rated  at 
thirty  shillings  silver.  After  the  re-coinage  in  1696  the 
guinea  stood  at  2^-.  dd.  Sir  Isaac  Newton,  who  was 
master  of  the  mint,  proposed  to  reduce  the  guinea  to  a  cir- 
culating value  of  2\s.  At  a  parity  with  silver  it  should  have 
been  20^-.  8^/.  Remaining  at  2\s.^  a  difference  of  only  four 
pence  to  the  pound,  drove  out  the  white  metal,  and  England 


was  forced  to  a  gold  currency.  The  opposite  treatment  in 
France  gave  that  country  a  silver  currency,  and  the  silver 
standard  prevailed.  On  the  other  hand,  the  discovery  of  gold 
in  California  and  Australia  added  so  immensely  to  the  stock 
of  the  world's  gold  that  the  ratios  were  changed  by  their 
new  conditions  ;  the  fundamental  law  before  referred  to 
asserted  itself,  and  the  currency  of  France  became  gold  in 
place  of  silver. 

Such  fluctuations  as  we  have  quoted  under  a  double 
standard  cannot  be  prevented  by  the  combined  power  of  all 
nations.  An  international  congress  cannot  suspend  the  laws 
of  gravitation.  No  bimetallic  ratio  of  1 6  to  i  or  30  to  i  can 
prevent  one  or  the  other  from  having  its  value  as  bullion, 
regardless  of  its  stamp  at  the  mint,  which  determines  noth- 
ing but  the  r|uality  and  quantity  of  the  bullion  in  the  coin. 

An  act  of  Congress  may  make  one  metal  or  the  other  or 
both  a  legal  tender  for  debts,  and  thereby  create  a  fictitious 
value;  but  with  a  very  slight  change  of  the  ratio  in  market 
values,  one  or  the  other  will  be  sold  as  bullion,  and  that 
which  remains  for  a  circulating  medium  will  always  be  the 
least  valuable  as  bullion.  Such  is  the  immutable  law  which 
has  governed  this  cjuestion  in  all  ages,  and  no  power  on 
earth  can  change  it. 

What  is  the  best  course  for  this  country  to  pursue  for  the 
advancement  of  its  permanent  prosperity,  is  a  matter  of 
judgment,  but  the  facts  of  history  are  the  common  property 
of  mankind  and  the  true  guides  to  wisdom  for  the  formation 
and  exercise  of  a  sound  judgment. 

EXCHANGE. 

The  artificial  impediments  created  by  different  systems 
of  coinage  in  various  countries  having  commercial  inter- 
course are  regulated  and  adjusted  by  the  nominal  rate  of 
exchanging  the  coinage  of  one  country  for  that  of  another. 

The  gold  coinage  of  England  has  twenty-two  carats  pure 
metal  to  two  carats  alloy,  each  coin  having  a  percentage  of 
8.33+  alloy.  If  the  United  vStates  coinage  is  below  this 
standard,   and  has  only  twenty  or   twenty-one  carats  pure 


metal  to  three  or  four  carats  alloy,  we  cannot  exchange  it 
for  English  coin  of  the  same  weight  without  paying  the 
difference  in  value,  which  difference  is  the  fixed  nominal 
exc/ia/ige.  When  the  two  countries  have  the  same  standard 
for  coinage,  then  the  exchange  is  reckoned  at  par.  If 
however,  they  use  different  metals,  gold  and  silver,  there 
can  be  no  such  thing  as  par  of  exchange,  because  the  relative 
market  value  is  constantly  changing. 

COMMERCIAL    EXCHANGE. 

When  the  bankers  in  London  and  New  York  owe  each 
other  equal  amounts,  the  debts  of  one  offset  the  other,  and 
the  accounts  being  balanced  no  mone)'  passes.  If,  however, 
on  settling  day  New  York  owes  London  one  or  two  or  three 
millions  the  most,  then  the  balance  of  trade  is  against  us, 
and  we  must  pay  the  difference  in  coin.  During  this  con- 
dition of  trade  bankers'  bills  and  commercial  bills  drawn 
against  bank  credits,  shipments  of  corn,  cotton,  wheat,  sil- 
ver, or  any  other  product,  will  sell  at  a  premium,  because 
they  are  payable  in  gold  of  the  highest  standard  and  at  a 
foreign  port.  This  premium,  it  will  be  seen,  can  never  ex- 
ceed the  specie  pointy  which  is  the  cost  of  shipping  gold  from 
New  York  to  London  or  vice  versa,  which,  with  insurance 
and  carriage,  is  reckoned  at  about  $5,000  for  each  million 
shipped,  and  is  the  cost  of  maintaining  such  commercial 
transactions  on  a  specie  basis.  So,  also,  when  the  balance 
of  trade  is  in  our  favor,  London  exchange  will  be  at  a  dis- 
count ;  but  that  discount  can  never  fall  below  the  cost  of 
shipping  gold  from  London  to  New  York.  The  two  specie 
points  of  premium  and  discount,  therefore,  mark  the  ex- 
treme limits  of  commercial  exchange  between  these  two 
great  countries,  because  when  the  limit  is  reached  the  gold 
will  be  shipped  one  way  or  the  other  as  the  balance  may  be. 

The  rate  of  interest  at  different  points  also  affects  the 
movement  of  gold.  If  the  Bank  of  England  will  lend  its 
surplus  gold  at  two  per  cent,  and  New  York  will  pay  six 
per  cent.,  the  London  bankers  will  ship  gold  to  New  York 
and  meet  the  demand  ;  but  when  the  surplus  is  being  re- 


lO 

daced  towards  the  point  fixed  for  the  reserve,  then  the  bank 
raises  the  rate  of  interest  and  stops  the  outward  flow  of  its 
gold  by  making  the  shipment  abroad  unprofitable.  So  it  is 
also  with  wheat,  cotton,  or  any  other  commodity.  When 
the  demand  is  great  and  the  price  is  high  in  England,  large 
shipments  will  be  made  from  America  imtil  the  English 
price  falls  so  as  to  make  further  shipments  unprofitable. 

A  depreciated  currency  necessarily  creates  an  adverse 
condition  of  the  market  for  exchange  and  destroys  credit. 
All  history  shows  that  there  is  no  cure  for  the  evil  but  a 
prompt  return  to  sound  conditions. 

Gold  naturally  flows  to  the  cheapest  point  for  the  pur- 
chase of  commodities, 'and  is  borne  thither  by  enterprising 
traders  who  find  their  best  profits  in  the  most  abundant 
and  cheapest  markets. 

VALUE. 

While  gold  has  been  selected  as  the  most  stable  measure 
of  value  in  exchange,  so  dtviajid  has  always  pre-determined 
the  value  of  commodities  to  be  measured  for  exchange  or 
commercial  distribution.  Any  commodity  for  which  there 
is  no  demand  has  no  value.  Gold  as  the  standard  of  meas- 
ure is  constant  :  but  the  demand  for  commodities  is  subject 
to  great  fluctuations.  The  only  commodity  for  which  there 
is  no  limit  to  the  demand  must  always  be  the  best  standard 
of  measure  for  all  other  commodities. 

When  the  law  arbitrarily  fixes  the  equation  of  i6  to  i 
for  silver  and  gold,  the  people  will  experience  very  serious 
trouble  when  the  commercial  ratios  are  at  variance  with  the 
law.  For  example,  the  law  declares  that  in  payment  of 
debts  sixteen  ounces  of  silver  shall  be  received  as  the  equiv- 
alent for  one  ounce  of  gold  ;  but  if  the  debtor  or  buyer  has 
gold,  or  a  gold  credit,  he  will  never  use  it  in  payment  of  his 
debt,  for  with  the  ounce  of  gold  he  can  under  some  condi- 
tions buy  thirty  ounces  of  silver,  pay  his  debt  with  sixteen 
ounces,  and  have  fourteen  ounces  of  silver  left,  making  a 
saving  of  47  per  cent,  on  his  debt.  It  will  be  observed,  how- 
ever, that  the  possessor  of  gold  is  the  only  one   who  can 


1 1 

make  this  saving;  for  he  who  has  only  silver  cannot  buy  the 
gold  without  a  loss  in  silver  which  is  fully  equal  to  the 
amount  saved  in  paying  his  debt.  English  traders  who  deal 
so  largely  in  American  products,  will  first  buy  silver  with 
their  gold,  and  pay  it  to  the  planter  for  his  cotton,  and  the 
farmer  for  his  wheat,  the  effect  of  which  would  l)e  to  export 
gold  and  import  silver  where  there  is  enough  already. 

It  will  be  claimed,  however,  that  the  demand  for  silver 
will  be  so  great  that  in  the  course  of  time  these  abnormal 
conditions  will  disappear  by  reason  of  a  readjustment  of 
prices:  but  when  India  and  Egypt  with  their  cheap  labor 
control  the  price  of  cotton,  and  Russia,  India,  and  the  Ar- 
gentine Republic  control  the  price  of  wheat  in  Liverpool, 
we  shall  have  these  and  similar  external  difficulties  to  over- 
come, and  the  road  to  readjustment  will  be  long  and  diffi- 
cult. 

The  holders  of  $9,000,000,000  of  obligations  in  the  form 
of  life  insurance  policies  will  not  be  made  happy  if  they  are 
paid  in  silver  or  any  other  depreciated  currency;  and  yet  if 
the  premiums  are  to  be  paid  in  silver,  the  policies  will  have 
to  be  paid  in  the  same  coin. 

If  the  merchant  who  has  insured  his  goods  against  de- 
struction by^  fire  on  a  gold  value,  can  only  collect  his  damage 
in  silver,  whenever  it  is  made  a  legal  tender,  he  will  suffer 
largely  thereby  ;  and  this  applies  to  every  man's  house  or 
business  building  in  the  country  as  the  immediate  effect  of 
a  loss  by  fire,  unless  the  policies  are  re-written  to  fit  the 
changed  conditions. 

The  adoption  of  a  bimetallic  currency  on  the  basis  of  16 
to  I,  making  both  metals  a  legal  tender  for  debts,  every 
thoughtful  man  must  know  will  lead  us  into  silver  mono- 
metallism and  multiply  the  evils  from  which  we  would 
escape. 

Congress  has  no  power  to  fix  the  value  of  any  commod- 
ity, except  as  a  legal  tender ;  and  when  this  legal  value  is 
above  the  world's  markets  it  is  purely  fictitious,  but  it  will 
pay  any  man's  debt  who  has  something  he  can  exchange  for 
it,  but  which  does  not  possess  an  equal  debt-paying  power  as 


12 

legal  tender.  The  difference  between  the  purchasing-  power 
of  gold  and  silver  is  evidenced  by  the  premium  on  gold, 
which  is  only  another  expression  for  the  discount  or  diminu- 
tion in  the  relative  value  of  silver,  but  does  not  necessarily 
signify  a  relative  increase  in  the  value  of  gold.  So  the  term 
"scarcity  of  money  "  does  not  mean  that  there  is  really  any 
less  money  than  before,  but  that  the  condition  of  trade  in- 
vites its  employment  and  circulation  in  business  affairs.  A 
"  tight  money  market "  generally  means  that  the  banks  have 
been  drained  by  the  demands  of  an  active  business,  and  the 
rate  of  interest  is  high. 

INVESTMENTS. 

Savings  banks,  trust  companies,  insurance  companies, 
estates,  and  private  persons  hold  an  enormous  volume  of 
bonds  issued  by  States,  counties,  towns,  railroad  and  other 
corporations,  payable  principal  and  interest  in  gold  ;  such 
being  the  contract  when  the  bonds  were  sold,  and  the  price 
and  rate  of  interest  w^ere  then  adjusted  to  that  basis.  Now 
if  Congress,  the  supreme  law-making  power,  shall  enact  that 
silver  on  the  basis  of  1 6  to  i  of  its  weight  with  gold  shall  be  a 
legal  tender  for  "  all  debts  "  and  for  "  all amounfs,"  it  may  be  very 
serious,  unless  the  contract  shall  take  precedence,  and  render 
the  legal  tender  act  inoperative  as  to  this  most  important 
class  of  securities,  for  otherwise  they  would  decline  in  value 
more  than  fifty  per  cent.,  and  the  distress  and  indignation  of 
the  people  would  rise  superior  to  that  of  any  power  which 
could  so  mistake  its  duty  to  the  public.  Hundreds  of  mil- 
lions have  been  added  to  the  public  debt  in  the  vain  en- 
deavor to  legislate  a  parity  of  silver  with  gold  on  a  basis 
which  is  not  only  arbitrary  but  impossible.  There  is  no 
more  reason  for  governmental  bounties  on  the  production  of 
sugar  and  silver  than  there  is  on  cotton  and  wheat.  The 
decline  in  the  price  of  these  products  has  been  greater  than 
the  decline  in  the  price  of  silver,  and  the  distress  has  been 
very  great.  We  seem  to  forget  that  the  products  of  the  United 
States  are  not  a  national  monopoly  ;  all  the  nations  of  the 
earth  are  in  sharp  competition  with  us,  and  the  laws  of  sup- 


13 

ply  and  demand  will  everywhere  prevail  without  respect  to 
the  acts  of  Coni^^-ress. 

Natural  laws  are  adjusted  to  changing-  conditions  auto- 
matically. The  closer  we  observe  and  the  closer  we  keep  to 
natural  conditions  the  better  it  will  be,  and  the  nearer  we 
shall  come  to  an  automatic  adjustment  of  our  currency  with 
the  affairs  of  the  people. 

William  the  Conqueror  put  one-twentieth  of  a  pound 
weight  of  silver  into  his  shilling.  Elizabeth  only  one-third 
as  much,  but  William's  shilling  would  buy  as  much  bread  as 
three  of  Elizabeth's.  We  must  either  put  a  dollar's  worth  of 
silver  in  a  silver  dollar,  or  the  farmer  will  have  to  change 
the  size  of  his  bushel  and  the  merchant  his  yard-stick  so  as 
to  be  on  equality  with  the  measure  of  silver.  If  silver  is  not 
given  a  fictitious  value  as  a  legal  tender,  silver  dollars  will 
then  pass  at  their  real  value  in  exchange  for  wheat  or  pay- 
ment of  debts.  Make  the  legal  tender  value  and  the  bullion 
value  alike,  and  it  will  wrong  no  one.  Free  coinage  will 
then  do  no  harm  and  honest  dollars  will  multiply  automat- 
ically to  fill  the  demands  of  trade. 

If  these  historical  facts  are  worth  anything  as  guides  to 
the  future,  then  it  is  certainly  true  that  the  United  States 
government  cannot  maintain  the  world's  volume  of  silver 
at  parity  with  gold,  on  the  basis  of  i6  to  i,  without  bank- 
ruptcy. 

The  demand  for  a  silver  standard,  about  i,ioo  years  ago, 
was  a  long  step  forward.  The  demand  for  it  now  is  a  long 
step  backward. 

To  say  that  the  millions  of  savings  bank  depositors,  who 
are  mostly  poor  people,  may  be  paid  off  with  dollars  worth 
only  fifty-three  cents,  would  be  an  ugly  item  in  our  financial 
history. 

The  bimetallic  scheme  for  reducing  the  purchasing 
power  of  the  laborer's  wages  fifty  per  cent,  will  not  go  un- 
challenged in  the  workshops  and  fields. 

The  theory  that  tmlimited  coinage  of  silver  with  an 
unlimited  legal  tender,  will  be  a  great  relief  to  the  debtor, 
is  unwittingly  a  confession  of  its  iniquity.     The  debts  which 


14 

one  man  owes,  another  man  owns.  A  poor  man  sells  his 
farm  because  he  lacks  the  means  or  the  health  to  work  it; 
his  more  thrifty  neighbor  buys  it  and  executes  a  mortgag-e 
for  payment  upon  the  interest  of  which  the  poor  man  must 
live.  By  what  principle  of  equity  must  the  poor  man  be 
robbed  of  half  his  bread,  in  order  that  the  thrifty  buyer  of 
his  land  may  get  it  at  half  the  price  he  agreed  to  pay  ? 
From  the  standpoint  of  commercial  honesty  this  doctrine  is 
wrong  end  up. 

The  railway  indebtedness  of  this  country  is  the  largest  of 
all;  said  to  be  over  $6,000,000,000.  It  is  owned  everywhere, 
at  home  and  abroad,  and  interest  and  principal  is  largely 
payable  in  gold  ;  making  the  income  payable  in  silver  would 
double  the  debt  and  bankrupt  the  companies,  filling  the  land 
with  beggars  and  relieving  neither  the  one  who  owes,  nor 
the  one  who  owns. 

We  may  pump  indefinitely  the  waters  of  the  sea  into 
capacious  cisterns,  but  we  cannot  change  its  level.  One 
Congress  after  another  may  force  the  purchase  of  silver  by 
the  sale  of  gold-bearing  bonds,  and  bankrupt  the  treasury; 
while  its  vaults  are  filled  to  repletion,  not  a  grain  will  there- 
by be  added  to  or  taken  from  the  world's  stock  of  bullion, 
and  the  government  ^''fiat "  will  be  the  jest  of  mankind. 

PROTECTION. 

The  most  extravagant  protectionist  has  never  presumed 
to  ask  the  government  to  '''fiat''  his  product  and  then  make 
the  fiat  good  by  selling  bonds  and  purchasing  the  wares 
which  the  markets  will  not  take.  That  sort  of  protection 
feeds  upon  its  own  vitals,  and  is  of  short  duration. 

INTRINSIC  VALUE. 

Very  many  people  have  an  idea  that  silver  has  an  intrinsic 
value  which  does  not  pertain  to  other  commodities.  From 
an  economic  standpoint,  however,  it  has  been  well  estab- 
lished that  the  value  of  any  commodity  is  to  be  judged  by 
its  relation  to  other  commodities  entirely  extraneous  to 
itself  and  for  which  it  may  be  exchanged. 


15 

The  term  intrinsic  must  necessarily  refer  to  a  quality 
within  itself  and  not  to  anything-  external.  xVny  commodity, 
therefore,  which  has  no  subject  of  comparison  other  than 
itself  cannot  be  said  to  have  a  definite  value  in  an  economic 
sense.  The  value  of  use  may  have  its  effect  on  the  value  of 
exchange,  but  in  economics  there  can  be  no  other  value 
than  that  of  exchange,  and  the  value  of  use  is  not  con- 
sidered; neither  is  the  amount  nor  cost  of  the  labor  required 
to  produce  it.  It  may  cost  double  to  produce  a  given 
quantity  of  silver  from  low  grade  ores  in  one  State  than  it 
costs  under  more  favorable  conditions  in  another;  but  that 
fact  has  no  consideration  in  the  bullion  market.  A  Bank  of 
England  note  which  will  exchange  for  gold  has  an  economic 
value  but  no  intrinsic  value,  and  the  labor  of  its  production 
is  not  considered.  The  concurrent  demand  for  two  com- 
modities in  diff-rcnt  possession,  is  the  original  source  of 
value  and  the  cause  of  exchange,  which,  being  common  to 
all  commodities,  determines  the  relation  of  one  to  the  other, 
and  gives  a  definition  of  value  which  is  natural  and  con- 
sistent. 

ARTIFICIAL    VALUES. 

Artificial  values  are  created  by  excessive  and  unnatural 
demands.  Congress  may  arbitrarily  order  the  purchase  of 
three  or  four  millions  of  silver  per  month  and  coin  it  into  dol- 
lars, for  which  there  is  no  other  need  or  demand  than  the 
desire  of  the  producer  to  sell;  but  the  time  comes  when  it 
has  to  stop,  and  the  reaction  is  more  disastrous  to  com- 
mercial affairs  than  the  entire  value  of  the  silver  pur- 
chased. 

The  stock  of  silver  owned  and  controlled  by  the  United 
States  government  is  a  menace  to  the  whole  world,  and  has 
done  the  silver-producing  states  more  harm  than  it  is  all  worth. 
Stimulating  production  at  extravagant  cost  in  order  to  take 
advantage  of  a  forced,  arbitrary,  and  unnatural  demand 
must  always  be  ruinous  when  the  time  comes  for  restoration 
to  the  natural  order  of  all  things. 


i6 

THE    UNIT. 

The  unit  of  value  in  the  United  States  is  twenty-five  and 
eight-tenths  grains  of  gold  nine-tenths  fine  ;  and  this  quan- 
tity and  quality  is  called  a  dollar.  Its  principal  use  is  the 
service  which  it  renders  as  the  standard  measure  of  all  other 
commodities  for  which  it  may  be  exchanged.  The  selection 
of  this  material  for  the  office  which  it  performs  is  the  result 
of  an  experience  in  trade  which  covers  the  entire  history  of 
civilization,  and  the  experiments  and  practice  of  mankind  in 
all  nations  with  divers  other  substances  and  things  as  substi- 
tutes and  legal  equivalents,  the  chief  of  which  is  silver. 

Gold  and  silver  have  been  termed  the  precious  metals,  for 
the  reason  that  they  have  useful  and  desirable  properties 
other  than  the  money  value  of  exchange.  Their  intrinsic 
qualities  are  imperishable  and  unchangeable.  Pure  gold  and 
silver  have  but  one  quality  of  metal,  and  there  are  no  adjec- 
tives like  good,  better,  and  best  to  describe  such  quality. 
They  have  great  utility  in  the  arts,  and  b.eing  indestructible 
are  most  desirable  for  possession,  and  take  high  rank  in  the 
confidence  of  all  men  as  security  for  debt  and  a  certificate  of 
credit  for  the  prompt  supply  of  all  needful  commodities. 
The  selection  of  these  metals  to  perform  the  functions  of 
money  has  been  the  natural  development  of  the  ages,  and  is 
witness  to  the  universal  judgment  of  all  nations  that  they 
are  best  qualified  for  that  service.  So  long  as  the  supply 
and  demand  kept  the  two  metals  on  a  natural  parity,  it  was 
only  a  matter  of  convenience  or  choice  whether  it  should  be 
one  pound  of  gold  or  sixteen  pounds  of  silver  ;  but  when  the 
markets  are  everywhere  overstocked  with  silver,  and  the 
pressure  to  sell  is  greater  than  the  demand,  then  the  parity  is 
lost,  confidence  disturbed,  and  it  is  utterly  repudiated  as  a 
standard  of  measure,  except  to  that  extent  which  the  law 
compels  its  reception  for  debt.  For  this  disastrous  condition 
of  things  there  is  only  one  remedy,  and  that  is  to  stop  pro- 
duction until  the  natural  parity  is  restored.  Passing  laws  to 
restore  parity  at  the  cost  of  the  public  treasury  would  only 
be  another  name  for  a  charge  or  tax  on  all  other  commodities 
for  the  amount  required.     This  would  stimulate  further  pro- 


•7 

duction,  multipl}'  the  evil,  destroy  confidence,  and  make  the 
crash  all  the  more  terrible  by  its  postponement,  at  the  cost 
of  national  credit. 

If  silver  has  been  demonetized,  who  in  the  wide  world  is 
responsible  for  it  but  the  silver  producers  who  have  so 
choked  the  bullion  markets  of  the  world  that  the  demand 
has  been  smothered  by  an  over  supply.  The  very  fact  that 
the  vaults  of  the  United  States  Government  are  all  full  and 
can  hold  no  more  is  a  constant  hazard  to  the  bullion  markets 
of  the  world.  The  German  government  relieved  its  own 
surcharged  vaults  by  selling  its  silver  for  so  much  gold  as 
they  could  get  for  it.  It  was  a  relief  to  Germany,  but  a  load 
on  the  general  market.  The  United  States  Government 
cannot  now  sell  its  stock  of  silver  for  one-half  its  original 
cost.  The  silver  producers  now  propose  to  relieve  them- 
selves by  such  legislation  as  will  force  all  other  industries  to 
buy  the  product  at  a  higher  price  than  it  is  worth  in  any 
market  in  the  world,  for  they  tell  us  that  this  forced  demand 
would  put  up  the  price  of  bullion,  and  increase  the  purchas- 
ing power  of  the  silver  dollar.  What  reason  in  the  world 
the  farmer  can  have  for  putting  up  the  price  of  silver,  when 
by  the  same  act  he  is  forced  to  buy  it  with  a  larger  quantity 
of  wheat,  does  not  appear  ;  as  the  price  of  wheat  is  gov- 
erned by  the  market  in  Liverpool,  and  the  farmer  cannot 
mark  up  his  wheat  to  meet  the  price  of  silver.  It  is  for  the 
interest  of  all  industries  that  they  be  allowed  to  buy  silver 
dollars  if  they  want  them  on  the  best  terms  possible,  and 
without  any  interference  on  the  part  of  government  in  the 
interest  of  silver  at  the  people's  expense. 

The  claim  that  free  coinage  and  unlimited  tender  would 
make  money  plenty  for  every  man's  use  is  squarely  against 
the  experience  of  ages  and  opposed  to  well-known  principles 
of  economic  science.  If  it  is  true  that  the  price  of  silver 
would  rise  by  reason  of  the  unnatural  pressure  of  law  and 
artificial  demand,  it  cannot  possibly  be  true  that  the  price  of 
wheat  and  cotton  would  be  higher  in  the  same  proportion, 
for  Russia,  India,  Egypt,  and  the  Argentine  Republic  con- 


j8 

trol  the  price  of  wheat  and  cotton  in  this  country  by  making- 
the  price  in  Liverpool ;  and  this  cannot  be  prevented  by  acts 
of  Congress,  neither  by  the  rise  or  fall  of  silver. 

Bimetallism  means  a  double  standard,  two  metals  both  of 
which  being  declared  by  Congress  to  have  a  fixed  relative 
and  nominal  value,  and  either  ma}^  be  taken  at  its  nominal 
value  as  the  true  measure  of  all  other  values  in  exchange  ; 
but  in  payment  of  debts  the  debtor  may  take  /lis  iJwice  which 
metal  he  will  use,  and  he  always  uses  that  which  has  the  low- 
est market  or  exchange  value.  Quick  to  perceive  the  effect 
of  the  double  standard,  the  seller  now  takes  his  oftion  and 
marks  up  his  goods  to  a  point  where  opposite  the  dollar-mark 
we  read  fifty  per  cent,  discount  for  payment  in  gold  and  no 
credit.  He  has  discovered  that  a  measure  which  is  at  one 
time  four  per  cent,  too  long  and  at  another  is  fifty  per  cent, 
too  short,  is  not  much  of  a  standard  for  anything.  He  has 
also  found  an  economic  truth  that  there  can  be  only  one 
standard  and  that  exactness  in  the  measure  of  values  in  use 
and  values  in  exchange,  does  not  reside  permanently  in 
anything. 

The  advocates  of  bimetallism  and  a  double  standard  con- 
tend, that  the  differences  referred  to  do  not  show  a  decline 
in  the  exchange  value  of  silver,  but  a  rise  in  the  exchange 
value  of  gold.  If  this  claim  is  true,  how  can  it  be  demon- 
strated so  that  the  fact  may  be  considered  proven  and  no 
longer  left  open  as  an  item  in  the  dispute  ? 

From  i860  to  1873  it  is  certain  that  silver  commanded  a 
premium  over  the  gold  standard  continuously  from  one  to 
four  per  cent.,  and  for  that  reason  disappeared  entirely  from 
circulation,  and  fractional  paper  currency  took  its  place. 
During  the  year  1873  the  decline  in  silver  reached  its  parity 
with  gold. 

The  average  price  per  fine  ounce  in  1873  was  $1.28.24. 
The  average  value  of  the  silver  dollar  in  1873  was  .98.87. 
The  commercial  ratio  of  silver  to  gold  in  1873  was  16.17  to  i. 
The  average  price  per  fine  ounce  in  1893  was  .70.17. 
The  average  value  of  the  silver  dollar  in  1893  was  .54-27. 
The  commercial  ratio  of  silver  to  gold  in  1893  was  29.45  to  i. 


19 

The  same  corresponding"  values  and  ratios  prevailed  in 
the  exchanges  of  Europe. 

This  enormous  decline  over  a  period  of  twenty  years  is 
to  be  accounted  for  so  that  we  can  determine  whether  it  is 
to  be  attributed  to  a  rise  in  gold,  or  fall  in  silver,  and  the 
question  should  be  met  fairly. 

First.  In  1873  the  world's  production  of  silver  for  the 
year  was  $81,800,000. 

Year  by  year  the  rate  of  production  increased  until  it 
reached  in  1892  an  annual  production  of  $196,105,000,  an 
increase  of  more  than  239  per  cent,  over  the  year  1873,  when 
silver  was  par  with  gold. 

Second.  In  1873  Germany  adopted  the  single  gold  stand- 
ard, and  threw  upon  the  bullion  markets  of  Europe  her 
large  stock  of  silver,  which  caused  a  sharp  decline. 

lliird.  In  1873-4-5  Denmark,  Norwa}^,  vSweden,  and 
Holland  adopted  the  gold  standard  and  stopped  the  coinage 
of  silver  except  for  small  change. 

Fourth.  In  1878  the  Latin  Union  stopped  the  coinage  of 
full  legal  tender  silver  coins  and  it  has  not  been  resumed. 

Fifth.  In  1876  Russia  suspended  the  coinage  of  silver 
except  for  such  amounts  as  were  required  for  her  trade  with 
China. 

Sixth.  In  1879  Austria,  and  in  1892  Hungary,  suspended 
the  free  coinage  of  silver,  and  adopted  the  gold  standard. 

Seventh.  In  1893  India  closed  her  mints  to  free  coinage, 
and  the  United  States  repealed  the  purchasing  clause  of  the 
act  of  1890,  which  called  for  4,500,000  ounces  per  month. 

There  was  nothing  to  prevent  the  declination  of  silver, 
which  simply  obeyed  the  laws  of  gravitation,  and  it  was 
excessive  production  more  than  all  other  causes  combined 
which  forced  it  down.  An  increase  of  the  supply  and  a 
decrease  in  the  demand,  produced  its  natural  result. 

In  this  connection  it  would  be  unwise  to  say  that  the  in- 
creased demand  for  gold  in  those  countries  where  it  had 
been  made  the  single  standard  did  not  have  any  effect  upon 
the  exchange  value  of  gold  for  other  commodities.  But  as  it 
has  been  made  tJie  standard  by  which  all  other  values  are 


20 

measured,  there  is  no  other  "bench-mark"  or  fixed  point, 
above  or  below  which  the  fluctuations,  if  any,  can  be  meas- 
ured as  to  its  own  value  in  exchange,  therefore  such  standard 
measure  or  unit  of  value  must  be  treated  as  constant  and 
invariable  for  economic  questions.  Every  attempt  to  erect 
another  standard  by  which  the  constancy  of  the  gold  stand- 
ard shall  be  tried,  will  only  result  in  confusion,  and  disturb 
rather  than  create  confidence  in  any  standard. 

There  are  but  three  options  :  The  single  gold  standard, 
the  bimetallic  or  double  standard,  and  the  single  silver 
standard. 

To  the  single  gold  standard,  the  objection  is  raised  that 
there  is  not  gold  enough  in  the  world  for  that  purpose,  and 
in  all  fairness  it  must  be  admitted,  that  if  all  nations  should 
suddenly  adopt  the  single  gold  standard  the  strain  at  certain 
points  would  be  very  great,  and  for  a  time  considerable  in- 
convenience would  follow.  Those  countries  would  suffer 
the  most  where  the  people  are  their  own  bankers  and  every- 
thing bought  is  paid  for  in  cash  from  hand  to  hand. 

Banks  are  the  natural  and  convenient  clearing-houses  for 
the  people ;  and  where  they  exist  under  proper  regulations 
and  restrictions  the  actual  volume  of  cash  required  by  the 
community  which  they  serve  is  only  a  fraction  of  that  which 
would  otherwise  be  an  absolute  necessity.  A  check  for  one 
thousand  dollars  may  transfer  a  bank  credit  from  A.  to  B., 
and  again  from  B.  to  C,  and  C.  to  D.,  until  the  actual  trade 
liquidations  of  that  one  payment  may  amount  to  ten,  twenty, 
or  thirty  thousand  dollars,  without  the  handling  of  a  single 
specie  dollar.  This  is  illustrated  on  a  large  scale  by  the 
daily  bank  clearings  in  the  city  of  New  York.  The  day 
would  not  be  long  enough  and  the  risk  would  be  very  great 
for  each  bank  to  collect  the  checks  which  in  a  single  day's 
business  are  received  over  its  counter  on  many  other  city 
banks  ;  whereas,  by  sending  them  all  into  the  clearing- house 
the  exchanges  are  made  in  an  hour,  and  the  balance  only  has 
to  be  provided  for,  which  is  but  a  mere  fraction  of  the  busi- 
ness transacted.     So,  also,  between  commercial  nations  the 


21 

exchanges  are  made  by  bills  of  exchange,  drafts,  letters  of 
credit,  etc.,  and  coin  is  only  shipped  to  cover  balances  which 
are  comparatively  small.  But  a  single  gold  standard  would 
not  prevent  the  use  of  silver  in  moderate  transactions,  nor 
for  purposes  of  change.  If  its  legal-tender  value  is  limited 
to  ten  dollars  there  will  be  no  less  silver  in  active  circulation  than 
there  is  now. 

A  bimetallic  or  double  standard  is  an  utterly  impossible 
thing ;  two  weights  for  a  standard  pound,  two  lengths  for  a 
standard  yard,  are  gross  absurdities. 

The  third  option  is  a  single  silver  standard,  by  means  of 
which  gold  would  become  a  commodity,  with  its  central  mar- 
ket in  London,  and  none  in  the  United  vStates,  for  it  would 
all  leave  us. 

The  strong  reasons  in  favor  of  a  single  silver  standard 
are  :  — 

First.  It  is  one  of  the  great  products  of  the  country,  and 
we  want  to  sell  it.  In  this  respect  it  occupies  the  same  posi- 
tion as  wheat,  corn,  cotton,  tobacco,  and  all  other  products, 
the  surplus  of  which  we  are  compelled  to  sell  at  the  market 
price,  whatever  it  may  be.  The  silver  farmer  cannot  sell  his 
crop  in  Europe  because  the  markets  are  overstocked  and  the 
price  is  low,  therefore  he  goes  to  Congress  and  asks  the  gov- 
ernment to  buy  his  product  and  take  the  risk  of  holding  it. 
This  gives  the  silver  producer  an  advantage  which  no  other 
producer  enjoys,  and  is  unfair  to  every  other  industry  which 
takes  the  risk  of  its  own  production. 

Second.  "  If  silver  is  made  the  standard  measure  of  all 
values  in  this  country  then  the  demand  for  its  use  as  money 
would  be  so  largely  increased  that  the  price  would  go  up  im- 
mediately to  par  with  gold,"  which  means  an  advance  of  50 
per  cent,  in  the  price  of  silver. 

If  that  is  true,  then  the  cotton  planter,  and  the  wheat 
raiser,  would  have  to  pay  in  their  products  double  price  for 
their  dollars,  because  the  government  cannot  use  its  power 
to  put  up  the  price  of  wheat  and  cotton  as  well  as  silver.  It 
will  be  observed  that  the  plan  for  a  silver  standard  means 
also    that   the    silver    producer    can    exchange    his    surplus 


22 

product  for  gold,  while  uU  other  industries  must  exchang-e 
their  surplus  products  for  silver.  The  silver  producer  does 
not  care  to  exchange  silver  for  silver,  unless  the  silver  he 
gets  in  return  is  made  a /eg a/  tc/ider  iov  all  amounts  —  and 
in  that  condition  he  can  exchange  it  for  gold. 

It  is  a  great  fallacy,  however,  to  suppose  that  the  in- 
creased use  of  silver  for  currency  will  materially  advance 
the  price  unless  all  other  nations  adopt  the  same  standard, 
for  it  is  certain  that  even  a  small  advance  in  the  price  would 
bring  to  the  United  States  a  sufficient  supply  from  Europe 
to  force  it  down  again. 

FREE  COINAGE. 

Will  do  no  harm  unless  silver  is  made  a  legal-tender  for  all 
amounts  ;  limit  the  legal-tender  to  ten  dollars  and  no  one 
will  waste  breath  on  free  coinage. 

Nothing  can  be  permanent  which  gives  any  one  product 
an  unjust  advantage  over  all  other  products  at  government 
expense.  It  is  purely  a  question  of  economics  and  just 
trade,   and  not  a  question  of  party  politics. 

The  cry  for  '■'cheap  money  and  J>/eji(v  of  it,''  is  a  catch 
phrase,  and  a  bait  to  the  unwary.  When  business  is  good, 
good  money  abounds.  When  business  is  bad,  bad  money 
does  not  make  it  better.  The  laborer  cannot  obtain  even 
bad  money  for  idleness  ;  but  when  his  labor  is  in  demand  he 
has  no  trouble  in  getting  the  best. 

The  treasury  vaults  in  Washington  and  elsewhere  are 
filled  with  silver  until  there  is  no  room  for  more,  but  it  does 
not  promote  business. 

The  governinent  is  issuing  bonds  and  buying  gold  to 
maintain  the  parity  of  idle  silver,  and  stimulate  the  produc- 
tion of  more,  but  it  does  not  stimulate  business  nor  inspire 
confidence  either  at  home  or  abroad.  It  is  a  policy  in  direct 
opposition  to  the  experience  of  the  ages,  and  the  best 
authorities  the  world  over  condemn  it.  The  drastic  remedy 
for  an  over-production  of  tenantless  houses  is  to  stop  building. 
If  on  the  contrary  a  booming  city  government  in  order  to 
provide  employment  for  its  idle  masons  and  carpenters  sells 
bonds,  lays  out  new  streets,  and  continues  to  build,  it  in- 


23 

volves  the  whole  community  in  a  o-eneral  bankruptcy,  and 
the  remedy  is  worse  than  the  disease.  Buying-  four  hundred 
millions  of  silver  gave  temporary  relief  to  the  miners,  and 
a  lasting  burden  to  the  people.  It  did  not  stop  the  decline, 
but  hastened  it  by  continued  production.  The  extra  session 
of  1893  stopped  further  buying,  but  the  stock  now  piled  up 
in  the  government  vaults  could  not  be  quickly  sold  for  more 
than  one-third  its  cost.  Such  is  the  result  of  applying 
artificial  force  to  the  natural  laws  of  supply  and  demand. 

LIFE  INSURANCE  AND  SAVINGS  BANKS. 

The  advocates  of  a  silver  standard  have  severely  con- 
demned the  officers  of  those  companies  which  have  given 
warning  that  a  silver  standard  with  a  silver  deposit  and  a 
silver  premium  will  bring  forth  nothing  but  silver.  By  thus 
rejecting  the  natural  crop  from  the  seed  they  sow,  they  con- 
demn themselves.  They  are,  indeed,  of  those  who  would 
gather  grapes  from  thorns,  and  figs  from  thistles.  The 
people's  reserve  for  the  future  is  largely  with  life  insurance 
companies  and  savings  banks.  The  resulting  possibilities 
are  the  effects  of  accumulating  compound  interest.  If  this 
accumulation  is  silver  then  the  dividends  and  payments 
must  be  silver,  and  the  officers  and  directors  of  these  com- 
panies have  no  power  to  do  otherwise,  for  whatsoever  is 
sown  that  they  must  reap,  and  of  all  men  the  advocates  of  a 
silver  standard  should  not  reject  the  fruit  from  their  own 
planting.  Nothing  can  be  more  significant  of  the  danger 
which  lurks  in  this  scheme  than  the  bad  temper  with  which 
its  advocates  have  received  the  suggestion  that  they  may, 
some  day,  have  to  accept  their  own  coin  in  payment  of  their 
own  claims. 

WANT    OF   CONFIDENCE. 

England  takes  first  rank  as  a  commercial  power  because 
of  the  integrity  and  stability  of  her  monetary  system.  The 
pound-sterling  is  known  and  respected  at  its  true  value  in 
every  port  of  the  world.  To  our  shame  this  is  not  true  of 
the  United  States  dollar,  and  the  merchant  who  buys  goods 
in  China,  Japan,   India,  Australia,  or  South  America  must 


24 

pay  for  them  by  sterling  exchange  on  London,  which  is 
good  everywhere.  This  is  mainly  owing  to  want  of  confi- 
dence in  our  monetary  system,  which  is  likely  to  imdergo 
some  radical  change  at  any  session  of  Congress.  The  per- 
manent establishment  of  our  money  unit  on  a  gold  basis 
would  be  an  effectual  remedy  for  the  evil,  and  confidence 
would  be  everywhere  established. 

NOT   GOLD    ENOUGH. 

The  claim  that  there  is  not  gold  enough  for  the  business 
transactions  of  the  country  is  a  great  mistake.  Where 
there  is  confidence  enough  there  is  gold  enough,  and  no 
amount  of  silver  will  suffice  for  the  lack  of  confidence. 
Two  or  three  twists  of  the  British  lion's  tail  and  a  foolish 
threat  of  paying  our  debts  with  silver,  will  give  wings  to  a 
few  millions  of  gold,  which  flies  away  to  London,  taking  the 
place  of  our  own  securities.  Then  we  employ  J.  P.  Morgan 
&  Co.  to  coax  it  back  again,  and  pay  the  freight  both  ways. 
With  the  confidence  inspired  by  a  sound  monetary  system 
all  the  gold  required  wnll  come  to  us  for  the  asking,  so  long 
as  our  rates  of  interest  exceed  the  rates  in  England. 

Business  is  paralyzed  and  stagnant  at  all  points  in  the 
United  States,  not  from  want  of  money  or  other  facilities, 
but  for  want  of  confidence.  Every  business  man  is  distrust- 
ful and  anxious  for  the  immediate  future,  therefore  he  folds 
his  hands  and  waits. 

We  cannot  look  for  a  permanent  revival  of  business  until 
this  question  is  settled  and  the  United  vStates  adopts  a  mone- 
tary system  equal  to  the  best.  Our  present  system  is  de- 
monstrably the  worst  in  the  world.  If  we  take  to  our  grocer 
five  dollars  in  silver  and  five  dollars  in  gold,  he  will  take 
either  or  both  in  exchange  for  his  goods,  although  one  metal 
is  worth  only  half  as  much  as  the  other.  Pie  does  this 
because  the  United  States  Government  makes  good  the  differ- 
ence and  pays  it  out  of  the  public  treasury.  Hundreds  of  millions 
have  been  paid  out  in  this  way  for  the  purpose  of  holding  up 
silver  to  parity  with  gold  regardless  of  its  commercial  value. 
All  this  has  been  done  for  the  protection  of  the  silver  pro- 


25 

diicer  alone,  and  to  the  detriment  of  every  other  industry. 
It  is  time  that  the  silver  industry  should  seek  its  own  mar- 
kets and  stop  drawing  gold  from  the  United  States  treasviry 
for  proteetion. 

If  there  is  too  much  silver,  stop  the  production;  if  there 
is  not  too  much,  then  let  those  who  have  it  sell  to  those  who 
want  it,  just  as  all  other  commercial  products  are  sold,  and 
no  one  will  interfere.  An  immense  amount  of  silver  will 
always  be  required  for  fractional  coins  and  the  payment  of 
small  debts  even  under  a  single  gold  standard ;  and  these 
are  said  to  embrace  the  greatest  amount  of  all  human  trans- 
actions where  money  actually  passes  from  hand  to  hand. 

By  the  United  States  treasury  reports  we  find  that  about 
87  per  cent,  of  our  imports  and  more  than  92  per  cent,  of 
our  exports  are  from  and  to  countries  where  gold  is  the  sin- 
gle standard.  It  is  evident,  therefore,  that  any  other  stand- 
ard would  be  inconvenient,  confusing,  and  detrimental  to 
trade. 

Under  free  coinage  acts  over  a  period  of  eighty  years 
only  $8,000,000  were  called  for  by  the  people  of  the  United 
States.  Under  forced  coinage  acts  $215,000,000  were  coined 
in  eight  years,  but  few  went  into  circulation.  Nobody  will 
export  them  because  our  legal  tender  acts  cannot  go  with 
them.  Nobody  will  melt  them  because  their  bullion  value 
is  fifty  per  cent,  less  than  the  cost.  To  this  extent,  there- 
fore, we  will  have  to  remain  bimetallists,  unless  the  govern- 
ment re-melts  and  sells  the  bullion  at  a  loss  of  $107,000,000 
more.  Verily  the  experiment  of  holding  up  the  price  of 
silver  against  all  other  nations  has  been  a  very  costly  and 
instructive  lesson  to  the  people  of  the  United  States,  and  the 
time  has  come  when  silver  must  take  its  natural  place  with 
all  other  products,  and  its  appropriate  place  Avith  the  moneys 
of  the  world,  regardless  of  all  other  considerations. 

BIMETALLISM. 

Gold  and  silver  cannot  both  be  made  a  measure  of  the 
exchange  values  which  applied  to  commodities  constitutes 
the  commerce  of   the   w^orld.     The   standard  must  be  con- 


26 

stant.  It  may  be  gold  or  it  may  be  silver  ;  but  it  cannot  be 
both  for  the  perfect  reason  that  their  relations  to  each  other 
are  not  constant  and  cannot  be  made  so  even  by  interna- 
tional law. 

If  gold  is  the  standard,  the  weight  and  fineness  of  the 
metal  being  established,  then  the  money  unit  of  one  dollar 
becomes  invariable  ;  and  a  contract  which  has  twenty  days 
or  twenty  months  or  twenty  years  to  run  will  be  adjusted 
and  satisfied  without  any  appreciation  or  depreciation  of  the 
standard.  But  if  it  may  be  discharged  and  satisfied  with 
dollars  made  either  of  gold  or  silver,  then  the  payor  may 
gain  an  enormous  advantage  by  exercising  his  option,  and 
the  payee  will  lose  what  the  payor  gains.  Such  possibilities 
as  this  would  prevent  the  inaking  of  any  contracts  or  en- 
gagements which  could  be  thus  exposed,  and  the  sale  of 
long-time  bonds,  whether  state,  municipal,  or  corporate, 
would  be  impossible,  and  both  public  and  private  affairs 
would  be  sadly  impeded  and  confused. 

A  piece  of  gold  containing  twenty-five  and  eight-tenths 
grains  standard  metal  is  made  by  law  the  unit  of  value,  and 
is  called  a  dollar.  Possessing  two  of  these  pieces,  with  or 
without  the  mint  stamp,  they  will  exchange  each  for  the 
other  on  equal  terms,  and  one  as  well  as  another  for  other 
commodities.  There  can  be  no  such  thing  as  rise  or  fall, 
appreciation  or  depreciation,  shrinkage  or  expansion  in  the 
use  or  relation  of  these  dollars  to  each  other,  nor  in  relation 
to  the  commodities  whose  value  they  measure  in  exchange. 
But  when  we  erect  another  standard  and  make  another 
dollar  out  of  silver,  calling  four  hundred  and  twelve  and 
one-half  grains  of  standard  silver  the  exact  equivalent  of 
twenty-five  and  eight-tenths  grains  of  gold,  each  dollar  hav- 
ing the  same  function  as  the  other  and  each  being  a  legal 
standard  of  measure,  we  find  ourselves  in  the  midst  of  diffi- 
culties. The  relation  of  one  silver  dollar  to  another  silver 
dollar  is  constant,  but  the  relation  of  a  silver  dollar  to  a  gold 
dollar,  and  also  to  the  commodities  being  measured,  has 
changed  materially  ;  in  fact,  as  much  as  fifty  per  cent.  The 
result  is  that  one  or  the  other  of  these  coins  has  ceased  to  be 


27 

a  dollar;  the  gold  coin  is  150  cents,  or  the  silver  coin  is  only 
50  cents,  which  is  it  ?  The  gold  partisan  says  that  silver  as 
a  value  in  exchange  has  fallen  ;  the  silver  partisan  says  gold 
has  appreciated,  —  which  is  right  ?  We  go  into  the  markets 
and  we  find  everywhere  a  surplus  stock  of  silver  for  sale. 
The  great  decline  has  created  a  suspicion  as  to  its  stability, 
and  it  is  so  abundant  that  all  fear  it  may  go  still  lower ; 
therefore  no  one  cares  to  take  the  risk  of  holding  it.  The 
same  testimony  comes  from  all  foreign  markets  ;  there  is  a 
manifest  over-production,  and  the  supply  is  greater  than  the 
demand.  Silver  is  everywhere  being  dropped  as  a  proper 
measure  because  it  is  inconstant ;  the  gold  standard  is  ev- 
erywhere being  established  because  it  is  stable  and  constant. 
We  find  that  the  mint  values  for  gold  show  but  trifling  fluc- 
tuations anywhere,  while  the  mints  have  very  generally 
ceased  the  coining  of  silver  except  for  small  change,  and  the 
price  at  the  mint  is  not  in  excess  of  the  market  for  bullion. 
The  evidence,  in  fact,  all  points  one  way,  and  we  are  forced 
to  the  conclusion  that  an  over-production  of  silver  has  di- 
minished the  demand,  and  therefore  four  hundred  and  twelve 
and  one-half  grains  of  standard  silver  are  no  longer  one 
dollar,  but  that  twenty-five  and  eight-tenths  grains  of  gold 
still  fits  the  standard,  and  is  therefore  our  only  standard 
dollar,  and  it  cannot  rise  above  the  standard  in  respect  to 
itself.  There  may  be  a  great  variation  in  respect  to  silver 
and  all  other  commodities,  but  none  in  respect  to  gold, 
which  is  the  standard  measure  by  which  all  fluctuations  are 
determined,  or  it  is  not  a  standard. 

All  this  proves  conclusively  that  the  stamp  at  the  mint 
certifies  nothing  but  the  actual  weight  and  fineness  of  the 
coin,  and  has  nothing  to  do  with  values  in  exchange. 

Holding  silver  to  parity  with  gold  when  there  is  only  half 
a  dollar's  worth  of  silver  in  a  silver  dollar  is  like  offering  a 
premium  on  clipped  coins  and  counterfeits. 

We  deplore  as  much  as  any  one  can  the  condition  of 
things  which  checks  the  production  of  silver  and  affects  in- 
juriously a  large  industry  in  the  mining  states.  We  have 
large  interests  there  which  must  share  in  the  general  de- 


28 

pression;  but  there  are  fundamental  principles  which  lie  at 
the  roots  of  our  national  prosperity  the  discarding  of  which 
will  involve  the  whole  country  in  disaster  and  ten  times 
greater  loss.  Our  present  indebtedness  must  be  paid  in 
gold ;  and  to  this  the  good  faith  and  honor  of  every  good 
citizen  in  the  United  States  is  pledged,  and  it  will  be 
fulfilled. 

Another  evidence  that  it  is  silver  which  has  declined,  and 
not  gold  which  has  risen,  is  shown  in  the  bad  temper  of 
the  silver  party  and  the  means  they  employ  to  force  upon 
the  markets  an  artificial  demand  for  a  product  for  which 
there  is  no  room.  Let  us  not  be  deceived.  The  silver 
partisan,  by  the  very  means  which  he  employs  to  force  his 
goods  upon  an  unwilling  market,  confesses  that  silver  has  lost 
its  exchange  power,  and  for  that  reason  the  price  has  fallen. 
In  the  bullion  markets  for  gold  there  is  no  such  disturbance, 
and  the  standard  is  maintained  without  artifice  in  any  of  its 
various  phases. 

Can  the  people  of  the  United  States  restore  the  standard 
of  measure  to  silver  which  it  has  lost,  and  by  what  means 
can  it  be  done  so  that  it  will  be  permanent  ?  This  is  the 
question  which  is  now  agitating  the  people,  and  from  center 
to  circumference  the  whole  country  seeks  a  complete  answer 
to  the  question. 

The  double  standard  partizan  says  that  it  must  be  accom- 
plished by  legislation,  and  the  commercial  world  must  accept 
nolens  volens  the  exchange  values  which  are  established  by 
law.  The  single  standard  partisan  says  that  the  question 
must  be  governed  by  the  natural  force  of  economic  laws, 
which  cannot  be  regulated  by  statutes. 

The  double  standard  advocate  claims  that  Congress  has 
the  power  to  fix  the  quantity  of  gold  in  a  dollar  and  the 
quantity  of  silver  in  a  dollar,  and  then  to  declare  that  the 
exchange  value  of  these  respective  cpiantities  is  equal  and 
that  each  shall  be  a  legal  tender  for  all  amounts.  The  single 
standard  advocate  says  that  gold  and  silver  are  by  nature 
both  economic  quantities,  and  that  the  exchange  value  will 


29 

always  be  subject  to  variations  under  an  economic  law  stated 
as  follows:     The  value  of  silver  to  gold  will  increase  — 

First,  by  a  decrease  of  the  quantity ; 

Second,  by  an  increase  of  the  demand. 

So  also  the  value  will  decrease —  )  Macleod. 

First,  by  an  increase  of  the  quantity; 

Second,  by  a  decrease  of  the  demand. 

He  claims  also  that  the  means  for  the  increase  of  one  and 
the  decrease  of  the  other  cannot  be  made  permanent  by  any 
statutory  act  which  can  be  passed  by  any  power  or  conven- 
tion of  powers. 

He  claims  also  that  while  it  is  possible  for  legislative 
power  to  create  a  standard  by  fixing  the  unit  of  gold,  thus 
making  gold's  value  constant,  and  by  which  standard  the 
increase  or  decrease  of  all  other  values  must  be  measured, 
he  denies  that  there  can  be  two  standards  for  the  same  meas- 
ure, any  more  than  there  can  be  two  specific  gravities  for 
the  same  substance.  He  admits  that  the  standard  unit  may 
be  fixed  in  silver,  and  that  for  economic  purposes  the  use  of 
silver  by  all  nations  could  be  made  the  universal  measure. 
He  denies  the  expediency  of  such  a  change,  for  the  reason 
that  ninety-five  per  cent,  of  all  our  foreign  commercial  trans- 
actions are  with  countries  using  the  gold  standard  which  will 
not  change,  and  that  such  a  change  would  be  of  great  inter- 
national embarrassment,  ver}^  damaging  to  trade  both  foreign 
and  domestic,  and  of  no  benefit  to  anybody  other  than  the 
silver  producer  himself,  and  of  no  permanent  benefit  to  him, 
for  sooner  or  later  continued  production  will  overwhelm  the 
demand,  the  standard  will  be  disregarded,  and  chaos  will 
prevail.  The  economic  law  will  then  assert  itself,  and  the 
statute  become  obsolete. 

To  this  the  silver  advocate  replies  :  — "  The  fifty-cent 
silver  dollar  was  caused  by  the  demonetization  of  silver.  By 
reason  of  the  appreciation  of  gold  the  farmer's  products  have 
fallen  in  value.  If  other  things  which  the  farmer  wants 
have  fallen  also,  he  does  not  get  the  benefit  of  it  because  he 
sells  at  wholesale  and  buys  at  retail.  What  we  want  is  a 
dollar  which  will  hold  its  parity  with  the  property  which 
that  dollar  is  to  buy."  —  [Bryan's  speeches. 


30 

Economist  replies:  — 

Speaking  of  dollars  as  measures  of  value,  there  are  no 
fifty-cent  dollars  in  the  United  States,  for  the  government 
has  maintained  their  parity  with  gold  and  has  paid  the  cost. 
A  silver  dollar  will  therefore  buy  just  as  much  wheat  as  a 
gold  dollar.  It  is  a  blunder,  therefore,  to  say  that  the  farm- 
er's products  have  fallen  because  gold  has  appreciated  ;  gold 
has  not  appreciated,  and  the  farmer  can  get  gold  dollars  for  his 
wheat  just  as  well  as  silver  dollars,  if  he  wants  them.  It 
does  not  seem  probable  that  under  free  coinage  the  farmer 
will  be  any  more  likely  to  buy  at  wholesale  than  before. 
What  is  meant  by  '  a  dollar  which  will  hold  its  parity  with 
property,'  I  do  not  understand.  There  is  no  such  thing  as 
parity  with  property,  and  there  is  no  standard  for  parity 
other  than  gold.  Parity  with  wheat,  cotton,  and  dried  cod- 
fish would  be  nonsense,  and  yet  dried  codfish  was  once  used 
as  money.  The  farmer  knows  very  well  that  the  price  of 
silver  and  gold  bullion  in  the  United  States  can  have  noth- 
ing to  do  with  the  price  of  wheat,  for  that  is  determined  by 
the  supply  in  Liverpool  and  Russia  and  the  Argentine  ; 
when  the  crops  are  large  the  price  is  small.  On  the  other 
hand,  he  would  have  the  miner  believe  that  multiplying 
dollars  under  a  free  coinage  act  is  going  to  put  up  the  price 
of  silver  dollars  and  pull  down  the  price  of  gold,  thus  revers- 
ing the  law  of  supply  and  demand.  The  farmer  wants  to 
sell  his  product  and  buy  dollars  ;  the  owner  of  dollars  wants 
to  sell  his  dollars  and  buy  wheat ;  what  object  then  has  the 
farmer  in  putting  up  the  price  of  dollars  ?  The  price  of 
wheat  is  controlled  by  conditions  beyond  the  seas. 

The  silver  advocate  continues  :  — 

"  A  double  standard  and  free  coinage  will  make  money 
abundant  and  easy  to  get,  so  that  the  western  farmer  can 
pay  off  his  mortgage  to  the  eastern  money  grabber  and  get 
out  of  debt,  rather  than  lose  his  farm  by  process  of  fore- 
closure. 'A  young  man  buys  a  farm,  pays  $r,ooo  down 
and  gives  a  mortgage  for  the  other  thousand.  Money  rises 
in  value  until  it  is  worth  twice  as  much  as  it  was  when  the 
man  gave  the  mortgage,  so  that  it  takes  twice  as  much 
wheat  to  pay  the  interest,  twice  as  much  to  pay  the  taxes, 
and  twice  as  much  to  pay  the  debt.     The  value  of  the  land 


31 

has  g'one  down,  and  the  farm  is  no  longer  security  even  for 
the  $r,ooo  mortgat^e.  The  man  who  holds  the  mortgage 
^ets  the  farm  back,  and  is  twice  as  well  off  as  he  was  before. 
The  young  man  who  bought  has  lost  everything,  and  must 
begin  life  again.'  " — [Bryan's  speeches. 

Economist  replies  :  — 

From  an  economic  standpoint  here  is  a  queer  condition 
of  things.  Money  has  risen  one  hundred  per  cent,  above 
its  own  standard,  land  has  fallen  over  fifty  per  cent.,  and  farm 
products  and  taxes  have  not  changed  at  all.  Such  a  condition 
of  things  cannot  exist  as  has  been  here  stated,  for  if  the 
5''oung  man  sells  his  farm  product  for  money  under  the  precise 
condition  stated,  then  one-half  of  it  will  pay  off  just  as 
much  indebtedness  as  the  whole  would  pay  at  the  time  he 
bought  his  farm.  The  illustration  is  a  romance  of  the  imag- 
ination, but  not  a  fact  in  business  life.  When  the  silver 
advocate  talks  to  the  producer  of  silver,  he  wants  free  coin- 
age and  a  full  legal  tender  so  as  to  appreciate  the  value  of  his 
silver  money  to  parity  with  gold.  When  he  talks  to  the 
farmer,  he  wants  free  coinage  so  as  to  make  money  cheap  and 
abundant  and  thus  appreciate  the  value  of  his  product,  but  he 
says  nothing  about  the  legal  tender.  When  he  talks  to  the 
laborer,  he  wants  free  coinage,  cheap  money  and  enough  of 
it,  so  as  to  appreciate  the  nominal  wages  paid  for  his  toil,  but 
he  does  not  tell  him  that  if  his  wages  are  paid  in  gold  one- 
half  the  amount  is  better  than  the  whole  if  paid  in  silver. 
Now  he  talks  legal  tender  for  the  purpose  of  making  the 
laborer  believe  that  his  silver  has  the  same  purchasing  power 
as  gold,  and  in  that  case  he  gets  his  wages  doubled.  If  the 
legal  tender  clause  is  repealed  then  the  silver  dollar  will 
only  pass  for  its  commercial  value,  fifty  cents.  Repeal  the 
legal  tender  clause  as  to  the  gold  dollar  and  it  will  still  pass 
at  its  standard  value,  one  hundred  cents.  The  manifest  ob- 
ject, then,  of  the  full  legal  tender  clause  is  to  force  the 
people  of  this  country  to  accept  fifty  cents'  worth  of  silver  in 
place  of  one  hundred  cents'  worth  of  gold.  This  is  contrary 
to  every  principle  of  sound  economics,  contrary  to  every 
principle  of  commercial  honesty,  and  it  will  never  be  done. 
To   say  that   money  (meaning   gold)   is  worth   twice  as 


32 

much  at  one  time  as  it  is  at  another,  is  simply  darkening 
counsel  by  words  without  knowledge.  In  respect  to  itself 
gold  cannot  rise  above  its  own  standard.  An  ounce  of  stand- 
ard gold  in  one  man's  hands  will  always  exchange  for  an 
ounce  of  standard  gold  in  another  man's  hands,  an  ounce  of 
silver  for  another  ounce  of  silver.  The  relation  of  an  ounce 
of  gold  to  an  ounce  of  silver  may  change  and  so  also  the  rise 
and  fall  of  commodities  can  be  determined  by  the  relation  to 
other  commodities.  When  one  commodity  like  gold  or  silver 
is  separated  from  all  other  commodities  and  made  the  stand- 
ard of  measure  then  it  can  never  rise  or  fall  as  a  measure  by 
the  value  of  a  single  grain,  for  it  has  no  other  standard  of 
comparison  than  its  own  quantity,  and  one  quantity  must 
always  be  equal  to  the  same  quantity  of  the  same  thing.  If, 
however,  for  the  sake  of  multiplying  money  we  make  a 
double  standard  and  decree  that  sixteen  ounces  of  silver 
shall  be  the  equivalent  of  one  ounce  of  gold,  we  immediately 
introduce  an  element  of  comparison  ;  the  law  of  supply  and 
demand  asserts  itself,  and  a  question  arises  as  to  the  true 
equation  of  the  double  standard  ;  there  is  an  apparent  differ- 
ence in  the  measure  ;  has  the  gold  standard  lengthened  ?  or 
has  the  silver  standard  shortened  ?  Our  inquiry  is  limited 
to  the  conditions  which  apply  to  the  two  measures,  and  we 
find  that  from  i860  to  1873  the  silver  measure  was  the 
longest  by  from  two  to  four  per  cent.;  in  1896  it  is  the  short- 
est by  50  per  cent.  The  gold  standard  has  been  treated  as 
being  constant :  it  did  not  lengthen  to  the  silver  standard 
when  it  was  the  longest,  nor  does  it  shrink  to  its  smaller  di- 
mension when  it  is  shortest,  therefore,  gold  has  not  risen  nor 
fallen  but  silver  has  reached  such  extremes  of  fluctuation,  as 
to  prove  conclusively  that  a  double  standard  cannot  be  main- 
tained without  a  never-ending  change  of  the  commercial 
ratio.  A  scarcity  of  money  may  by  increasing  the  rate  of 
interest  show  an  apparent  increase  in  the  demand  for  all 
kinds  of  money  but  it  does  not  change  the  standard  measure. 
Bimetallism,  then,  means  silver  monometallism  and  noth- 
ing else. 


33 

The  silver  advocate  says  :  — 

"  Every  nation  which  goes  to  the  gold  standard  increases 
the  demand  for  gold,  and  every  increase  in  the  demand  for 
gold  raises  the  purchasing  power  of  an  ounce  of  gold  and 
lowers  the  purchasing  power  of  wheat  and  corn  and  other 
products  of  the  farm.  You  enshrine  gold  as  the  one  thing 
to  be  desired  and  all  mankind  pavs  tribute  to  the  golden 
calf. 

"  While  we  want  to  get  rid  of  the  gold  standard  we  must 
keep  the  thing  which  we  don't  want  t:ntil  aliens  shall  bring 
ns  the  relief  which  we  should  achieve  for  ourselves. — 
[Bryan's  speeches. 

Economist  replies  :  — 

The  purchasing  power  of  wheat  and  cotton  are  not  in 
any  way  affected  by  the  question  of  a  gold  standard  in 
foreign  countries.  Cheap  labor  in  Russia,  Egypt,  and  India 
can  put  these  products  in  the  warehouses  of  Liverpool 
cheaper  than  Iowa,  Dakota,  Minnesota,  Illinois,  or  Kansas. 
It  is  that  fact  and  not  the  kind  of  money  used  in  payment 
which  governs  the  price.  India  is  on  a  silver  basis,  and 
practically  so  is  the  Argentine  Republic,  their  crops  are  paid 
for  in  silver  ;  the  English  merchant  first  buys  the  money  of 
the  country  with  which  he  trades,  and  then  pays  it  out  for  the 
commodities  he  wants.  When  wheat  brought  $1.35  per  bushel 
in  Dakota  the  price  of  gold  and  silver  bullion  in  New  York  and 
London  had  nothing  to  do  with  it.  The  demand  was  great, 
crops  were  short,  and  the  supply  was  relatively  small,  it  was 
purely  a  question  of  supply  and  demand.  And. now  when 
wheat  is  worth  about  one-third  what  it  was  then,  it  is  still 
a  question  of  supply  and  demand,  and  the  '  rise  of  gold '  or 
'  fall  of  silver '  has  nothing  to  do  with  it ;  the  controlling 
factor  is,  how  much  have  the  competing  countries  got  to 
sell  and  at  what  price  will  they  sell  it  ? 

If  the  legal  tender  clause  should  be  repealed  to-morrow 
and  the  outstanding  certificates  redeemed  it  would  not  put 
up  the  price  of  wheat,  but  it  would  take  about  twice  as  much 
coined  silver  to  buy  a  bushel  as  it  does  now,  and  it  would  be 
worth  no  more  to  the  farmer  than  the  currency  he  gets  now. 
It  would  not  increase  the  purchasing  power  of  his  wheat, 
3 


34 

even  for  another  slice  from  the  'golden  calf,'  but  it  would 
send  his  children  through  the  fires  uni..  Moloch  to  get  the 
last  quotation  for  silver. 

The  leading  advocates  for  a  silver  standard  reject  gold 
for  the  reason  that  its  value  has  risen  so  high  and  so  rapidly 
that  the  purchasing  power  of  all  commodities  and  products 
have  been  greatly  reduced. 

The  advocates  for  a  gold  standard  reject  silver  because  it 
has  fallen  so  low  and  so  rapidly  that  double  the  quantity  is 
required  for  the  purchase  of  commodities  that  was  needed 
before  the  decline,  unless  parity  is  maintained  at  govern- 
ment expense. 

Only  one  of  these  propositions  can  be  true  in  the  main. 
The  facts  which  bear  upon  the  question  are  historical  ;  but 
the  conclusions  are  controlled  in  part  by  prejudice  and  in 
part  by  argument.  The  result  is  that  different  conclusions 
are  drawn  from  the  same  state  of  facts,  for  the  reason  that  a 
like  cause  does  not  invariably  have  the  same  effect ;  conse- 
quently the  postulate  assumed  in  one  case  will  not  apply  to 
the  other,  for  example  ;  the  sudden  influx  of  gold  between 
the  years  1850  and  1875,  greater  in  volume  than  the  entire 
product  for  the  previous  357  years,  would  quite  naturally  call 
for  a  marked  decline  in  the  exchange  value,  as  the  world's 
product  for  these  twenty-five  years  was  over  three  thousand 
three  hundred  niilHons  of  dollars.  vSo  far,  however,  from  its  caus- 
ing a  serious  decline  it  was  quickly  sought  for  and  absorbed 
by  those  far-seeing  countries  which  desired  to  substitute  a 
standard  of  gold  for  that  of  silver,  and  the  result  was  that  it 
crowded  out  an  equal  value  in  silver  and  took  its  place.  This 
caused  a  decline  in  silver  which  was  looked  for  in  gold  and 
gave  an  exception  to  the  rule  of  excessive  production,  with  a 
competent  witness  to  the  law  of  supply  and  demand. 

A  considerable  proportion  of  that  gold  was  from  Califor- 
nia, and  if  the  United  States  had  purchased  it  as  a  cover  for 
gold  certificates,  this  country  would  have  been  firmly  estab- 
lished on  a  gold  basis,  its  credit  largely  improved,  and 
France,  Germany,  Belgium,  and  Holland  would  probably 
have  been  still  on  a  silver  basis.     Keeping  our  gold  would 


35 

have  improved  our  market  for  silver,  of  which  we  had 
enough  and  to  spare,  and  fortified  our  national  credit  beyond 
the  assaults  and  jibes  of  men. 

Far-sii^hted  Germany,  having-  more  wisdom,  did  just  that 
thing.  Seeing  her  opportunity  to  get  the  gold,  she  made  a 
prompt  sacrifice  of  her  silver,,  but  got  nearly  double  what 
it  would  sell  for  now,  and  made  the  grandest  financial  stroke 
fi  the  century.  The  United  States  did  just  the  reverse, — 
bought  silver  and  rashly  agreed  to  maintain  the  certificates 
issued  thereon  at  parity  with  gold.  Permitting  a  re-issue  of 
the  same  certificates  brought  the  world's  stock  of  silver 
within  reach  of  a  centrifugal  pump  demanding  the  price 
of  parity,  and  unless  it  is  stopped  will  bankrupt  the  govern- 
ment ;  for  a  single  five-dollar  certificate,  rotated  often 
enough,  will  exhaust  the  treasury  of  its  gold.  It  was  the 
worst  financial  blunder  ever  made,  in  striking  contrast  with 
the  German   policy,  and  we  are   paying  dearly  for  it  now. 

It  is  not  what  you  think  or  I  think  about  the  quality  of 
the  reserves  which  are  the  basis  of  our  national  credit.  It  is 
what  the  world  thinks  ;  and  if  we  have  that  which  the  world 
will  take  from  us  at  any  moment  and  at  full  face  value,  then 
our  credit  will  be  the  best  in  the  world,  and  we  can  get  any- 
thing we  want  at  the  lowest  price.  But,  on  the  other  hand, 
if  we  have  that  which  the  world  does  not  want  and  will  not 
take  except  for  the  reason  that  we  have  nothing  else  to  give, 
then  the  cost  of  keeping  our  credit  on  an  equality  with  Great 
Britain,  Germany,  and  Holland  will  be  enormously  greater 
than  the  difference  in  cost  of  filling  our  treasury  with  gold, 
which  everybody  wants,  or  filling  it  with  silver,  which  has 
no  market  and  nobody  wants  or  can  afliord  to  keep  for  a  rise. 

The  disturbance  caused  by  the  fall  in  silver  has  involved 
the  country  in  losses  more  than  double  the  value  of  all  the 
silver  in  the  vaults  of  the  treasury.  All  of  which  would 
have  been  prevented  if  we  had  possessed  financial  wisdom 
enough  to  have  backed  our  treasury  certificates  with  gold 
instead  of  silver.  That  mistake  cannot  be  too  speedily 
repaired. 

To  the  amazement  of  all  other  nations  the  United  States 


36 

stands  alone  as  the  guarantor  of  a  price  for  the  world's 
silver,  which  shall  be  at  parity  with  gold  on  the  basis  of 
16  to  I.  It  is  the  most  reckless  and  the  most  stupendous 
imdcrtaking-  ever  entered  into  by  any  nation,  and  imperils 
the  property,  the  prosperity,  and  the  social  welfare  of  every 
family  in  the  whole  countr5^  •  Our  national  credit  is  already 
seriously  impaired  for  this  reason,  and  its  resources  are 
insufficient  for  the  task  which  has  been  undertaken  in  sup- 
port of  a  single  industr}',  which  has  grown  into  such  import- 
ance within  the  past  twenty-five  years. 

LEGISLATION  ABOUT  DOLLARS. 

In  1772  the  United  vStates  dollar  contained  377%  grains 
of  pure  silver. 

In  1785  the  Federal  Congress  adopted  the  silver  dollar 
as  the  money  unit  and  fixed  its  quantity  at  375.64  grains 
pure  silver.  The  vSpanish  milled  dollar  contained  386^ 
grains  pure. 

The  Act  of  1792  fixed  the  weight  at  37 iK  grains  pure 
and  416  grains  standard,  44.75  grains  being  alloy. 

The  same  act  made  the  gold  equivalent  24.73  grains 
pure,  on  the  basis  of  15  to  i.  In  1809  the  market  value  of 
gold  was  rated  at  i6)4  times  the  weight  of  gold.  Gold 
was  then  treated  as  a  commodity,  disappeared  from  circula- 
tion and  was  shipped  abroad  for  foreign  exchange.  Silver 
became  by  its  comparative  cheapness  the  circulating  me- 
dium, was  everywhere  recognized  as  the  money  unit.  The 
ratio  of  15  to  I  was  the  proposal  of  Alexander  Hamilton  and 
had  the  approval  of  Thomas  Jefferson,  who  was  then  Pres- 
ident, under  the  belief  that  both  metals  would  circulate  to- 
gether under  the  ratio  fixed  by  the  act  of  1792,  but  in  this 
he  was  mistaken. 

The  mint  was  fully  occupied  in  the  coinage  of  silver,  but 
none  of  the  dollars  came  into  circulation.  It  was  then  dis- 
covered that  the  bullion  which  came  to  the  mint  for  coinage 
was  principally  in  the  shape  of  Spanish  milled  dollars,  and 
that  the  new  dollars  were  immediately  shipped  to  the  West 
Indies  and  to  Mexico  for  exchange  at  par  for  Spanish  dol- 


37 

lars,  and  these  were  directly  brought  to  the  mint  for  re- 
coinage.  Thus  an  honest  Quaker  banker  in  Philadelphia 
turned  a  handsome  profit  by  the  free  use  of  the  mint  in 
coining  our  light  dollars  out  of  the  heavy  Spanish  dollars, 
which  trick  coming  to  the  knowledge  of  President  Jefferson 
he  issued  an  order  stopping  the  coinage  of  dollars,  and  the 
Philadelphia  banker  had  to  quit  that  profitable  business. 

The  coinage  of  the  silver  dollar  was  thus  suspended 
until  the  year  1836.  A  special  committee  appointed  in  1830 
to  consider  the  condition  of  the  currency  reported  that  since 
the  establishment  of  the  mint  in  1794  about  $37,000,000  had 
been  Qomed.,  four-fifths  of  which  had  been  exported,  leaving  only 
seven  or  eight  millions  in  the  United  States  after  an  expend- 
iture of  nearly  one  million  dollars,  which  Upton  finds  was 
''^  the  net  result  of  free  coinage  of  both  metals  for  a  period  of  fifty 
years." 

Then  came  the  war  against  the  United  States  bank  and 
the  clamor  for  a  change  of  the  ratio  from  15  to  i  to  16  to  i, 
which  was  approved  by  President  Jackson,  June  28,  1834. 

The  intention  of  the  government  was  to  restore  gold  to 
the  currency  and  drive  out  the  paper  dollars  issued  by  the 
United  States  bank.  Silver  was  no  longer  thought  of,  and 
was  completely  demonetized.  A  bill  was  introduced  to  pro- 
vide for  a  limited  coinage  of  subsidiary  coins  for  change 
and  small  transactions,  but  it  received  no  attention. 

To  promote  the  circulation  of  gold  President  Jackson 
directed  that  public  officers  should  receive  only  specie  in 
payment  of  public  dues. 

In  1846  the  sub-treasury  act  provided  that  nothing  but 
specie  should  be  received  by  the  government  on  any  ac- 
count, and  when  received  should  be  held  until  disbursed  by 
public  officers,  and  should  not  be  deposited  in  any  bank, 
hoping  by  this  means  to  create  a  demand  for  hard  money. 

In  1852  the  Senate  passed  a  bill  authorizing  the  Secre- 
tary of  the  Treasury  to  purchase  silver  bullion  and  to  coin 
it  into  fractional  pieces  reduced  by  seven  per  cent,  as  to 
weight  to  be  issued  only  at  par  in  exchange  for  gold.  This 
bill  was  introduced  by  the  bimetallist,  R.  M.  T.  Hunter, 


386383 


3S 

who  admitted  that  the  only  way  to  circulate  both  gold  and 
silver  was  by  the  subordination  of  silver  to  gold.  The 
double  standard  was  admitted  to  be  impracticable  as  one 
would  always  be  subservient  to  the  other.  Mr.  Dunham, 
who  had  charge  of  the  bill,  said : 

"  Gentlemen  talk  about  a  double  standard  of  gold  and  sil- 
ver as  a  thing  that  exists,  but  that  we  propose  to  change. 
We  have  had  but  a  single  standard  for  the  last  three  or 
four  years.  That  has  been  and  is  now  gold.  We  propose 
to  let  it  remain  so,  and  adapt  silver  to  it,  and  to  regulate 
silver  by  it." 

The  bill  became  the  law  in  February,  1S53,  and  gave 
general  satisfaction.  Every  one  could  get  silver  or  gold 
either  for  labor  or  commodities,  and  the  return  to  free  coin- 
age was  not  considered  or  desired  by  anybody.  Fractional 
silver  was  abundant,  and  Upton  says  that  for  "the  first  time 
in  the  history  of  the  country  we  had  a  true  bimetallic  cur- 
rency, silver  and  gold  circulating  in  harmony  side  by  side," 
the  market  for  silver  being  a  little  stronger  than  gold. 

In  April,  1S70,  the  Secretary  of  the  Treasury  prepared 
and  submitted  a  bill  making  new  regulations  in  regard  to 
the  mint  assay  officers  and  coinage  with  a  full  report  giving 
the  reasons  and  the  necessity  for  the  changes  recommended. 
The  report  stated  that  under  the  existing  and  legal  ratio 
between  gold  and  silver,  the  silver  dollar  was  at  a  premium 
of  three  and  one-half  per  cent.,  but  as  the  gold  dollar  was 
the  unit  of  account  no  change  of  ratio  was  desirable,  and  the 
bill  made  no  provision  for  further  coinage  of  silver  dollars 
as  they  could  not  be  put  in  circulation  when  they  were 
worth  more  for  the  melting  pot  than  for  money.  On  Decem- 
ber 9th,  the  same  year,  the  finance  committee  reported  the 
bill  to  the  Senate  with  amendments,  and  it  was  ordered  to  be 
printed.  After  a  discussion  which  occupied  two  days  it  was 
passed  and  sent  to  the  House. 

On  Jan.  13,  1871,  the  House  ordered  the  bill  to  be  printed 
and  referred  to  the  committee  on  coinage. 

On  February   25th  the  coinage  committee  reported  the 


39 

bill  with  another  amendment,  when  it  was  again  ordered  to 
be  printed  and  re-committed. 

On  March  9,  1871,  the  bill  was  again  reported  to  the 
House  and  ordered  to  be  printed.  On  Jan.  9,  1872,  Mr. 
Kelley  of  Pennsylvania,  chairman  of  the  committee,  rec- 
ommended the  passage  of  the  bill,  saying  that  the  commit- 
tee had  considered  the  bill  "  with  great  deliberation,  section 
by  section,  line  l)y  line,  and  word  by  word." 

After  considerable  discussion  the  bill  was  again  re-com- 
mitted, again  reported,  again  printed,  only  to  be  again  re- 
ported, again  printed  and  made  the  special  order  for  March 
12,  1872,  until  disposed  of.  Then  came  a  most  exhaustive 
discussion.  Mr.  Hooper  of  Massachusetts  explained  each 
section  of  the  bill,  which  explanation  and  argument  occu- 
pied ten  columns  of  the  Congressional  Globe,  dwelling  at  great 
length  upon  the  reasons  for  discontinuing  the  coinage  of 
the  silver  dollar,  the  principal  reason  being  that  if  put  in 
circulation  the  manufacturers  of  silver-ware  could  use  them 
at  a  profit  over  bullion,  and  they  would  immediately  dis- 
appear. 

Mr.  Potter  of  New  York  contended  that  the  legal  tender 
coin  of  the  country  should  be  of  one  metal  instead  of  two, 
and  that  should  be  of  gold  alone. 

Mr.  Kelley  called  attention  to  the  fluctuating  character  of 
two  metals  as  a  standard  and  urged  that  it  would  promote 
domestic  convenience  by  having  a  subsidiary  coinage  of 
silver  circulating  in  all  parts  of  the  country  as  a  legal  ten- 
der for  small  amounts. 

On  May  27,  1872,  the  bill  passed  the  House,  yeas  no, 
nays  13. 

The  bill  was  prepared  at  the  Treasury  Department,  and 
amended  by  Congress,  providing  for  the  coinage  of  a  silver 
dollar  weighing  384  grains,  and  making  all  the  silver  coins 
a  legal  tender  for  $5  in  any  one  payment  instead  of  all  sums 
less  than  one  dollar. 

The  bill  was  sent  to  the  Senate  and  referred  to  Senate 
committee  on  coinage  and  printed.  Upon  being  reported 
by  that  committee  it  was  again  printed.     Further  amend- 


40 

ments  beings  made  by  the  Senate  it  was  again  printed  with 
the  amendments,  and  after  a  discussion  which  occi:pied 
nineteen  columns  in  the  Congressional  Globe  it  passed  the 
Senate. 

The  bill  was  then  sent  to  the  House,  again  printed  and 
referred  to  a  committee  of  conference,  which  committee  re- 
ported the  bill  without  further  amendments  and  it  became 
a  law  Feb.  12,  1873.  The  Senate  amendments  struck  out 
the  subsidiary  dollar  of  384  grains,  and  substituted  the  trade 
dollar  of  420  grains  for  use  in  the  China  and  Japan  trade, 
but  did  not  make  it  a  legal  tender. 

This  is  the  story  of  '■^  the  crime  of  iSjj,''  and  the  so-called 
" surreptitious  passage"  oi  a  bill,  which  was  printed  thirteen 
times  by  order  of  Congress,  and  the  discussion  and  debates 
of  which  between  April,  1870,  and  February,  1873,  occupied 
no  less  than  one  hundred  and  forty-four  columns  in  the  Cofi- 
gressional  Globe,  printed  and  re-printed  in  ever}^  prominent 
newspaper  in  the  country,  and  is  now  denounced  by  free 
silver  orators,  who  have  the  cheek  to  say  that  they  did  not 
know  what  the  bill  meant  or  what  it  contained,  although 
they  voted  for  its  final  passage. 

The  claim  of  concealment  and  fraud,  which  these  men 
set  up  regarding  the  passage  of  that  bill,  if  it  proves  any- 
thing, proves  that  they  were  grossly  neglectful  of  what  was 
going  on  in  the  Congress  where  they  had  seats,  and  with 
whose  acts  they  are  charged  with  knowledge  and  responsi- 
bility. If  they  did  not  know  what  the  bill  contained,  it  is  a 
shameful  confession  of  neglect  of  public  duty.  If  they  did 
know,  then  their  present  claim  is  a  still  more  shameful  impo- 
sition upon  the  people  whom  they  seek  to  deceive. 

We  have  taken  Upton's  carefully  studied  account  of  the 
passage  of  this  bill  for  an  orderly  presentation  of  the  facts, 
which  we  have  not  seen  disputed.  \^Money  in  Politics,  pp. 
201  et  seq^ 

The  arguments  made  in  Congress  during  the  pendency  of 
the  bill  against  the  propriety  of  coining  silver  dollars  when 
they  were  worth  more  for  the  melting  pot  than  for  circula- 
tion, were  unanswerable  and  unanswered.     Under  the  condi- 


41 

tion  of  things  which  existed  when  the  bill  was  enacted,  the 
silver  producer  did  not  care  whether  his  silver  was  made  into 
dollars  or  forks  and  spoons,  for  it  did  not  affect  the  price  of 
his  product.  But  when  a  few  months  after  the  bill  became  a 
law,  the  silver  men's  product  began  to  fall,  then  they  wanted 
full  silver  coinage  to  provide  an  outlet  for  their  bullion  and 
they  began  to  denounce  the  law  and  all  those  who  had  a 
hand  in  its  making,  including  themselves. 

At  no  period  in  the  world's  history  has  there  been  any 
such  great  and  continued  decline  in  the  silver  product  as  we 
have  seen  since  1873,  and  that,  and  that  only,  is  the  cause  of 
the  present  disturbance  and  the  revolt  of  the  silver  producer. 

The  act  of  1873  did  not  demonetize  silver.  It  proscribed 
no  coin  from  circulation.  It  sold  neither  coin  nor  bullion. 
It  did  not  diminish  its  value  by  taking  away  its  character  as 
a  legal  tender.  It  prevented  any  further  purchases  except 
for  subsidiary  coins  on  government  account  which  it  was  not 
profitable  to  send  abroad,  or  melt  for  silver  plate.  For  the 
same  reason,  the  coining  of  silver  dollars  was  suspended  in 
1806,  but  in  1873  no  silver  dollars  were  in  circulation. 

INTERNATIONAL  CONFERENCE  AND  CONGRESS. 

The  first  general  convention  was  the  result  of  discussions 
by  the  delegates  to  the  Latin  Union.  France  took  the  initia- 
tive, and  the  convention  was  held  at  Paris,  June  17,  1867. 
The  United  vStates,  Great  Britain,  France,  Austria,  Bavaria, 
Baden,  Belgium,  Denmark,  Spain,  Greece,  Italy,  the  Nether- 
lands, Portugal,  Russia,  Prussia,  Sweden,  Norway,  Switzer- 
land, Turkey,  and  Wurtemburg,  Eight  sessions  were  held 
and  the  conference  was  closed  July  6,  1867.  All  of  the  States 
represented  declared  in  favor  of  a  single  gold  standard.  The 
president,  Dr.  Parieu,  in  his  valedictory  speech,  declared  that 
the  opinion  of  the  conference  "was  in  favor  of  a  gold  mono- 
metallic standard,"  and  that  was  the  limitation  of  the  power 
conferred  upon  the  convention,  except  its  recommendations 
respecting  a  universal  unit  of  money. 

England,  on  the  i8th  of  February,  1868,  appointed  a  com- 
mission to  consider  the  recommendations  of  the  Paris  confer- 


42 

ence.  The  commission  sat  from  March  13th  to  July  Sth,  but 
arrived  at  nothing  decisive  except  the  rejection  of  the  pro- 
posal to  change  the  vahie  of  the  pound  sterling. 

In  France  public  opinion  was  strongly  in  favor  of  gold 
as  the  single  standard,  and  so  continued  until  the  result  of 
the  war  with  Germany,  which  took  the  question  of  monetary 
legislation  as  an  international  question  out  of  her  hands. 

Germany,  however,  did  not  neglect  the  opportunity  of 
reforming  her  monetary  system  by  a  gold  standard  on  the 
basis  of  15.5  to  i.  The  legal  tender  act  demonetized  silver, 
and  the  silver  coin  was  called  in,  put  in  the  crucibles  and 
sold  as  bullion,  to  the  extent  of  two-thirds  the  eirculation. 
In  1 87 2  the  Scandinavian  States  adopted  gold  in  place  of  a 
silver  standard.  In  May,  1876,  the  Netherlands  changed 
from  a  silver  to  the  gold  standard. 

Before  and  during  the  adjustment  of  these  important 
changes  the  increasing  production  of  silver  in  the  United 
States  so  affected  international  exchanges  that  all  nations 
found  themselves  in  serious  complications  growing  out  of 
the  rapid  decline  in  silver. 

The  tribute  payable  by  India  to  Great  Britain,  amounting 
to  the  gold  value  of  about  $80,000,000  per  annum,  was  enor- 
mously increased  when  considered  with  the  decreasing  value 
of  Indian  rupees. 

In  March,  1876,  Parliament  appointed  a  commission  to 
inquire  into  the  causes  for  the  depreciation  in  silver,  but 
without  power  to  suggest  a  remedy. 

August  15,  1876,  the  United  States  Congress  appointed  a 
commission  to  inquire  into  the  causes  for  the  depreciation  in 
silver  and  the  feasibility  of  a  bimetallic  system  as  well  as  the 
resumption  of  specie  payments.  The  majority,  Jones,  Bogy, 
Willard,  Groesbeck,  and  Bland,  reported  a  recommendation 
to  remonetize  silver,  and  to  invite  another  international 
conference.  The  resulting  act  was  known  as  the  Bland  bill. 
It  authorized  the  coinage  of  the  standard  dollar  and  restored 
its  legal  tender  character  Feb.  28,  1878.  On  invitation  from 
France  the  conference  authorized  by  the  same  act  met  in 
Paris  Aug.  10,  1878.     The   United   States   members  recom- 


43 

mended  the  free  coinage  of  silver  by  a  general  agreement 
with  full  legal  tender.  Belgium,  Switzerland,  and  Norway 
opposed  this.  England  refused  to  modify  her  monetary 
system.  Germany  did  not  take  part  in  the  conference. 
France  considered  it  useless  to  discuss  an  international  ratio 
which  was  unattainable,  and  nothing  was  accomplished. 

The  situation  was  so  serious  that  in  May,  1879,  Germany 
suspended  the  sales  of  silver. 

On  April  19,  1881,  by  request  of  the  United  States  and 
on  the  invitation  of  France,  a  third  international  convention 
assembled  in  Paris.  All  of  the  European  States,  Canada, 
and  India  were  represented,  as  well  as  the  United  States. 

France,  the  United  States,  Austria,  Italy,  the  Nether- 
lands, and  British  India  declared  for  bimetallism.  Belgium, 
Switzerland,  Greece,  and  the  Scandinavian  States  declared 
against  bimetallism.  England  and  Germany  declared  that 
no  change  in  their  systems  could  be  entertained,  but  in  case 
of  agreement  among  the  nations,  something  might  be  done 
to  increase  the  use  of  silver. 

The  convention  closed  July  8,  1881,  by  adjournment  to 
April  12,  1882,  to  see  what  might  be  done  by  legislation  in 
the  interval.  The  convention,  however  was  not  again  called 
together. 

Agitation  continued,  and  a  bimetallic  congress  assembled 
at  Cologne  in  October,  1882,  but  its  resolutions  did  not  have 
any  influence  on  the  Powers. 

In  the  United  States  the  proposed  repeal  of  the  compul- 
sory coining  clause  in  the  Bland  bill  attracted  general 
attention. 

In  England,  Sept.  20,  1886,  a  royal  commission  was 
appointed  to  "inquire  into  the  present  changes  in  the  rel- 
ative values  of  the  precious  metals." 

A  divided  report  made  no  recommendation  of  any 
change,  but  suggested  another  international  conference. 

During  the  Paris  Exhibition  in  1889  a  free  International 
Congress  was  held,  and  on  invitation  of  the  committee  194 
members  attended  ;  but  the  congress  closed  without  coming 


44 

to  any  practical  conclusion.  The  declination  in  the  value  of 
silver  continued. 

By  invitation  of  the  United  vStates  a  conference  was  held 
in  Brussels  in  1892,  the  purpose  being  stated  as  follows  :  — 
'■  For  the  purpose  of  considering  what  measures,  if  any,  could 
be  taken  to  increase  the  use  of  silver  in  the  currency  sys- 
tems of  nations." 

The  convention  met  26th  November  and  delegates  were 
present  from  Austria,  Belgium,  Hungary,  Denmark,  France, 
Germany,  Great  Britain,  India,  Greece,  Italy,  Mexico,  The 
Netherlands,  Norway,  Portugal,  Roumania,  Russia,  Sweden, 
Spain,  Switzerland,  Turkey,  and  the  United  States. 

The  usual  discussion  took  place  and  a  committee  pro- 
posed that  the  European  States  will  buy  in  each  year 
30,000,000  ounces  of  silver  on  condition  that  the  United 
wStates  continue  to  purchase  54,000,000  ounces  per  annum, 
and  that  free  unlimited  coinage  be  maintained  in  British 
India  and  ]\Iexico.  It  was  also  proposed  to  withdraw  the 
smaller  gold  coins  and  bank  notes  less  than  five  dollars  from 
circulation.  This  proposal  was  not  agreed  to.  The  atten- 
tion of  the  congress  was  then  turned  to  the  bimetallic  pro- 
posal of  the  United  States. 

The  French  delegate  then  stated  clearly  that  he  could 
not  advise  his  government  to  open  the  mints  to  the  free 
coinage  of  silver  unless  the  monometallic  states  would  do 
so ;  and  that,  as  the  question  stood,  the  return  to  the  free 
coinage  of  silver  must  be  regarded  as  settled. 

The  United  States  stood  alone  in  the  proposal  for  bimet- 
allism. India  had  already  acted  by  requesting  a  committee  of 
the  British  government  to  consider  the  proposal  to  close  the 
Indian  mints  to  the  coinage  of  silver,  ivith  a  view  to  the  adop- 
tion of  a  gold  standard. 

HAS  SILVER  FALLEN  IN  VALUE  ? 
It  is  a  very  singular  circumstance  that  in  view  of  all  these 
international  congresses,  conventions,  and  conferences  com- 
prising the  expert  financiers  and  scientists  of  all  nations  to 
consider  what  proper  means  should  be  employed  to  arrest  the 


45 

decline  in  silver  that  there  should  be  any  one  so  blind  to  the 
fact,  as  to  claim  that  it  is  not  silver  which  has  depreciated 
but  gold  which  has  appreciated. 

It  is  instructive  to  read  the  arguments,  prophecies,  and 
declamations  of  senators  and  representatives  on  the  passage 
of  the  coinage  act  of  1878  which  was  p'assed  over  the  veto 
of  the  President.  We  were  told  then,  as  we  are  now,  that 
the  act  of  remonetizing  silver  would  stop  its  decline,  put  it 
into  circulation,  make  the  rich  contented,  the  poor  happy, 
advance  wages  and  prices,  and  bring  us  general  prosperity; 
but  it  did  nothing  of  the  kind,  and  notwithstanding  the  pur- 
chases made  by  government,  has  continued  its  downward 
course. 

Not  a  single  speech  made  in  favor  of  that  bill  will  ever 
go  into  our  school  books  as  an  example  of  forensic  eloquence 
or  statesmanship. 

There  was  one,  however,  made  against  it  by  Senator 
Lamar  of  Mississippi,  which  will  go  down  to  posterity  as  a 
bright  example  of  that  honor  and  courage  which  abide,  and 
sustain  an  honest  soul  under  most  trying  circumstances. 

The  legislature  of  Mississippi  instructed  its  senators  to 
vote  for  the  bill  and  also  for  the  bill  repealing  the  Resump- 
tion Act. 

Senator  Lamar,  in  justification  of  his  refusal  to  obey  these 
instructions,  said  : — 

"  Mr.  President,  between  these  instructions  and  my  con- 
victions there  is  a  great  gulf.  I  cannot  pass  it.  .  .  .1  have 
always  endeavored  to  impress  the  belief  that  truth  is  better 
than  falsehood,  honesty  better  than  policy,  courage  better 
than  cowardice. 

"  To-day,  my  lessons  confront  me.  To-day,  I  must  be  true 
or  false,  honest  or  cunning,  faithful  or  unfaithful  to  my 
people.  Even  in  this  hour  of  their  legislative  displeasure 
and  disapprobation  I  cannot  vote  as  these  resolutions  direct, 
I  cannot  and  will  not  shirk  the  responsibility  which  my 
position  imposes.  My  duty,  as  I  see  it,  I  will  do,  and  I  will 
vote  against  this  bill.  .  .  Then  it  will  be  for  them  to  de- 
termine if  adherence  to  my  honest  convictions  has  disquali- 
fied me  from  representing  them." 

Those  brave  words  will  live,  and  that  honest  vote  will  be 


46 

cherished  with  pride  in  future  years,  as  a  model  for  that 
manliness  and  greatness  of  soul  which  refuses  to  lay  official 
duty  under  the  feet  of  a  legislative  power,  which  could  con- 
demn and  punish,  but  could  not  dishonor. 

The  senator  was  right  :  and  the  bill  proved  to  be  an  i;tter 
failure  in  all  that  was  expected  from  it  by  its  most  ardent 
friends.  It  was  in  violation  of  every  principle  of  economic 
law:  and  there  was  no  power  to  clothe  it  with  success. 

The  same  reasons  were  urged  for  the  passage  of  the  act 
in  1890.     Like  causes  led  to  its  failure  and  repeal  in  1893. 


INDIA  AS  A  FACTOR. 

The  important  place  which  India  occupies  as  a  factor  in 
the  metallic  currency  systems  of  the  world  is  not  generally 
understood.  She  has  a  population  three  and  one-half  times 
larger  than  the  United  States,  and  has  a  very  productive 
soil.  The  excess  of  her  net  imports  of  silver  over  exports 
for  the  year  1893  was  $60,934,726.  The  excess  for  fifty-seven 
years  previous  (1836  to  1863)  was  $1,698,999,075.  Professor 
Shaw  tells  us  that  during  long  periods  India  has  been  such 
a  "  sink  "  or  receptacle  of  the  world's  metallic  currencies 
as  to  be  the  recognized  safety-valve  of  the  nations,  by 
providing  an  outlet  for  any  sudden  inflow  of  the  precious 
metals,  and  thus  has  preserved  the  equilibrium  when  disas- 
ter to  the  currency  system  was  imminent. 

There  had  for  a  long  time  been  a  constant  balance  of 
trade  in  favor  of  India;  but  the  steady  fall  in  the  value  of 
silver  from  1873  to  1893  was  such  as  to  turn  her  annual 
surplus  into  a  large  deficit,  owing  to  her  gold  obligations  to 
England. 

The  impending  disaster  was  stayed  by  the  large  silver 
purchases  made  by  the  United  States  government,  and  it  is 
now  claimed  that  the  only  practical  solution  of  India's  diffi- 
culty is  in  the  adoption  of  a  gold  standard.  Such  a  course 
would  naturally  have  the  serious  effect  of  precipitating  a 
still  further  decline  in  silver,  and  might  liberate  such  a  vast 
volume  of  coin  and  bullion  as  to  overwhelm  all  countries. 


47 

and  bring  on  a  crisis  which  no  country  has  the  strength  to 
stay  or  control. 

For  the  United  States  to  sit  still  and  see  other  countries, 
one  after  another,  firmly  established  on  a  gold  basis,  remain- 
ing alone  as  tlie  indorser  and  giiara)itor  of  tJie  parity  value  of  the 
world's  gold  and  silver,  is  only  to  invite  a  disaster  which  would 
be  overwhelming  and  irreparable. 

A  free  coinage  act  with  unlimited  tender,  and  a  guar- 
antee to  maintain  the  parity  of  silver  with  gold  "  ///  the  mar- 
kets and  in  the  payment  of  debts,''  on  the  basis  of  1 6  to  i,  or  even 
20  to  1,  is  the  most  reckless  undertaking  in  the  world,  and 
no  power  or  combination  of  powers  will  take  the  hazard. 

It  is  plain  to  see  how  a  full-fledged  anarchist  or  an  ex- 
treme socialist  might  advocate  such  a  measure,  for  the  result 
would  be  more  destructive  than  dynamite,  and  society  would 
have  to  be  remodeled  on  some  new  plan. 

A  free  coinage  acton  the  basis  indicated  would  immedi- 
ately destroy  the  market  for  silver  as  a  product  of  the  United 
States,  for  the  bullion  of  other  countries  would  flow  in  an 
overwhelming  stream  to  our  mints,  and  at  prices  which 
would  close  every  mine  in  the  country  and  exhaust  the 
treasury  of  its  gold. 

The  scenes  in  the  extra  session  of  Congress  in  1893 
would  be  completely  reversed,  and  all  would  hasten  to 
repeal  the  act  as  they  would  fly  to  the  extinguishment  of  a 
consuming  fire. 

So  much  for  prophecy  which  is  founded  on  the  cupidity 
of  mankind  rather  than  any  economic  law;  for  all  such  ques- 
tions would  take  on  an  exceptional  phase,  and,  by  a  suspen- 
sion of  every  well-known  principle,  wait  for  such  reorganiza- 
tion and  readjustment  of  human  affairs  as  would  mark  a 
new  era  in  both  domestic  and  foreign  affairs. 

The  cable  has  already  advised  us  that  ''  Englishmen  are 
protesting  against  the  minting  of  silver  coins  which  cost  but 
two  shillings  and  sixpence  per  ounce,  and  selling  it  to  the 
people  for  five  shillings  and  sixpence."  It  is  claimed  that 
the  government  of  Queen  Victoria  is  pursuing  the  same  dis- 
graceful  policy  of  the  ministry   of   Queen    Elizabeth   who 


48 

made  sixty-two  shillings  out  of  twenty.  As  a  silver-using 
people  Englishmen  protest  against  a  "depreciated  currency." 
The  demand  for  a  shilling's  worth  of  silver  in  an  English 
shilling  may  have  its  echo  in  the  demand  for  a  dollar's  worth 
of  silver  in  a  silver  dollar ;  that  will  go  a  long  way  in  pacify- 
ing those  who  object  to  the  fraud  of  a  fifty-cent  dollar. 
Give  the  people  the  full  worth  of  their  money  and  they  will 
be  peaceful  and  contented.  There  is  no  excuse  which  will 
satisfy  either  the  English  or  American  workman  that  half 
an  ounce  of  silver  is  just  as  good  as  a  whole  one,  because 
it  would  tire  him  less  to  lug  it  about.  If  the  half  ounce 
is  only  a  token  of  the  full  ounce,  and  the  mint  must  be  paid 
for  the  whole  in  order  to  get  the  half,  it  would  be  quite  safe 
to  guarantee  that  the  laborer  would  prefer  the  whole  thing 
to  the  token,  and  would  not  complain  of  the  weight. 

If  free  coinage  means  that  anybody  can  take  one  dollar's 
worth  of  silver  to  the  mint  and  have  free  use  of  the  ma- 
chinery to  stamp  it  as  being  two  dollars,  giving  the  silver 
owner  instead  of  the  government  the  benefit  of  the  fraud,  it 
is  quite  likely  that  the  mints  would  be  kept  busy;  but  it 
would  be  far  better  if  they  were  kept  idle. 

Laboring  men  and  men  of  small  means  would  derive  no 
benefit  from  the  free  use  of  the  mints,  but  the  mine  owners, 
the  bullion  dealers,  and  speculators  generally,  would  have  it 
all  their  own  way,  to  the  great  detriment  of  the  public. 

FULL  LEGAL  TENDER. 

Here  lies  the  chief  iniquity  of  the  proposed  act.  Strip 
the  cheap  dollar  of  the  fraudulent  force  which  is»given  to  it 
by  these  three  words,  and  it  will  stand  before  the  world 
on  its  honest  merits.  It  will  go  to  those  who  need  and  want 
it,  instead  of  being  forced  at  double  price  on  those  who 
do  not  want  it. 

The  silver  speculators  and  brokers  could  take  contracts 
for  the  payment  of  other  men's  debts  and  mortgages,  taking 
the  same  property  thus  improved  by  fifty  per  cent,  as  a 
security,  and  the  mortgage  indebtedness  of  the  country  could 
be  liquidated  by  a  quasi  fifty  per  cent,  bankrupt  law,  avail- 


49 

able  to  those  abundantly  able  to  pay,  as  well  to  as  those  who 
are  not,  thus  legalizing  the  most  stupendous  system  of  fraud 
which  has  ever  stained  the  annals  of  history. 

The  credit  and  the  integrity  of  the  government  which 
would  give  sanction  or  opportunity  to  any  such  manipula- 
tion of  its  currency,  would  be  a  by-word  and  a  hissing  in  the 
mouths  of  honest  men  the  world  over. 

OVER-PRODUCTION. 

When  we  speak  of  an  over-production  of  gold  or  silver, 
we  refer  to  three  noticeable  changes  or  effects  produced 
by  that  cause,  viz.,  the  effect  which  an  increasing  supply 
has  on  the  demand ;  the  effect  which  such  superabundant 
supply  has  on  the  fixed  or  legal  ratio  of  one  to  the  other ; 
and  the  effect  which  such  supply  has  on  the  exchange 
value  for  commodities  and  its  relation  to  population. 

It  will  be  admitted  without  argument  that  the  com- 
modities which  go  into  actual  consumption  have  a  demand 
which  is  in  the  main  governed  by  population.  The  home 
market  being  supplied,  the  surplus  flows  into  the  channels 
of  foreign  commerce. 

In  American  history  the  extraordinary  production  of 
the  precious  metals  which  is  first  noticed  took  place  about 
the  middle  of  the  sixteenth  century,  the  date  for  its 
beginning  being  fixed  by  the  authorities  at  about  1545, 
and  refers  to  the  output  from  the  mines  of  Potosi,  Mexico, 
and  Peru,  being  forty-five  times  more  in  silver  than  gold, 
and  reducing  the  exchange  value  of  silver  for  gold  from 
thirty-five  to  forty  per  cent,  in  the  course  of  the  succeed- 
ing century.  Nowithstanding  the  increased  production  of 
gold,  which  was  subjected  to  the  operation  of  the  same 
economic  law  of  supply  and  demand,  the  great  prepon- 
derance of  silver  had  the  effect  of  changing  the  fixed 
ratio  from  i  to  11  to  i  to  15  by  the  end  of  the  century. 
The  annual  production  not  being  consumed  nor  absorbed 
by  a  proportionate  increase  of  population,  was  added  to 
the  pre-existing  supply,  and  thus  becoming  an  over-pro- 
duction, had  the  effect  stated. 


50 

Professor  Langhlin  fixes  the  next  noticeable  period 
from  1780  to  1820,  during-  which  time,  by  reason  of  the 
increasing-  richness  of  the  mines,  especially  those  of  ]\Iexico, 
the  product  was  much  larger  than  for  the  entire  century 
between  1545  and  1660.  The  effect,  however,  was  not  so 
marked,  because  of  the  much  larger  pre-existing  mass  to 
be  also  affected  thereb3^  At  this  point  Prof.  Laughlin  calls 
attention  to  the  fact  that  the  tables  of  prices  do  not  disclose 
"  any  diminution  in  the  purchasing  power  of  gold "  ;  for 
which  reason  he  concludes  that  the  change  of  relations  was 
due  to  a  further  decline  in  silver. 

The  act  of  1834  changed  the  ratio  from  15  to  i  to  16  to  i, 
but  diminished  the  weight  of  the  gold  coin  as  well,  which 
reduced  its  value  by  six  per  cent.  Under  the  operation  of 
these  changes  gold  came  into  circulation  and  silver  retired. 

The  act  of  1853,  caused  by  the  enormous  influx  of  gold 
from  California,  placed  gold  in  the  same  position  w^hich  the 
act  of  1834  gave  to  silver.  Gold  was  the  standard  money  of 
account,  and  no  one  concerned  himself  about  ratios  until  the 
great  decline  in  silver  in  1876. 

The  world's  gold  product,  185 1  to  1875,  was  $3,3i4,553,ooo 
The  silver  product  for  same  period  was      .       $1,395,125,000 

This  enormous  gold  product  in  twenty-five  years,  by  reason 
of  its  great  abundance  crowded  out  silver,  and  by  the  in- 
creased demand  for  gold  and  the  lessened  demand  for  silver 
stayed  the  decline  in  gold  and  hastened  the  decline  in  silver. 
During  the  twelve  years,  1852  to  1864,  France  alone  imported 
$680,000,000  of  gold  and  exported  $345,000,000  of  silver, 
showing  that  at  that  time  there  was  an  abundance  of  silver, 
and  to  spare.  The  production  of  silver  in  face  of  this  cir- 
cumstance was  being  rapidly  increased.  The  silver  product, 
which  for  the  United  States  in  i860  was  only  $150,000,  in 
1873  was  $35,750,000,  and  in  1892  $82,101,000. 

From  1873  to  1S95  it  amounted  to 11,214,751,000 

From  1873  to  1895  the  gold  product  was         .         .         .  $830,660,000 

These  facts  show  an  over-production  sufficient  to  account 
for  the  continuous  decline  in  silver. 


51 

COMPARED  WITH  WHEAT. 

1866-95,  average  value  wheat  product  per  year,       .  .         $335,674,260 

1S66-95,  average  decrease  in  value  per  year.            .  .  3,194,487 

1866-95,  average  price  per  bushel  for  period,            .  .  97.9 

T866-95,  average/a//  in  price  per  bushel  per  year  (cents),  5.6 

Average  price  per  bushel  in  1866,    .         .  .  $2.19.6 

Average  price  per  bushel  in  1895,    .         .  .  -50.9 

SILVER  PRODUCT  COMPARED  WITH  POPULATION. 
SILVER 

1860-95,  average  product  per  year, $37.983>36i 

1860-95,  average  yearly  increase, $1,997,250 

POPULATION 

1860-95,  average  population  for  period 48,146,409 

1860-95,  average  increase  per  year, 1,067,630 

Percentage  of  average  yearly  increase  in  silver  product  to 

average  production, 5-26^ 

Percentage  of  average  increase  in  population  per  year  to 

average  population  for  period, 2.21^ 


1873,  value  of  silver  per  ounce, $1.29 

1895,  value  of  silver  per  ounce, .65 

1873-95,  ratio  of  value  in  '95  to  value  in  '73,        .         .         .  50-4/^ 

WHEAT 
1866-95,  ratio  of  value  in '95  to  value  in '66,        .         .         .  23.1^ 

The  increase  in  the  production  of  silver  has  been  more 
than  double  the  increase  in  population.  The  decline  in  wheat 
has  been  more  than  three  times  the  decline  in  silver;  all 
of  which  demonstrates  an  overproduction  of  silver,  which  is 
the  most  important  factor  in  accounting  for  the  decline,  ex- 
cept that  the  decline  in  wheat  is  owing  to  cause's  other  than 
the  decline  in  silver.  It  shows,  also,  that  if  gold  is  not  abso- 
lutely stable  as  a  measure  of  value  it  is  incomparably  more 
so  than  silver,  which  is  liable  in  any  year  by  excessive  pro- 
duction to  overwhelm  the  commercial  world  with  remediless 
disaster. 


52 

The  facts  before  us  demonstrate  that  a  bimetallic 
standard  is  utterly  impossible;  the  chasm  is  too  wide  for 
legislation,  and  the  preferences  of  inankind  the  world  over 
cannot  be  changed  by  an  act  of  Congress,  nor  by  a  congress 
of  nations.  We  have  reached  a  point  where  any  increase  in 
the  production  of  gold  will  have  the  immediate  effect  of 
displacing  silver,  w'ithout  loss  of  prestige  or  demand  for 
the  dominant  metal. 

The  arts  will  be  our  future  safety-valve  for  surplus 
silver,  and  the  demand  for  subsidiary  coinage  will  increase 
with  the  population. 

CONCLUSION. 

Taking  the  price  of  wheat  and  cotton  in  Liverpool  for 
1873  as  a  basis,  we  find  a  decline  if  applied  to  the  crop  of 
1893  amounting  to  no  less  than    (wheat)  $213,018,400 

Decline  in  cotton  crop,   1893,  310,200,000 

Total  decline  for  two  items,  $523,218,400 

If  the  prices  realized  in  1873  could  have  been  realized 
in  i893-'94-'95,  the  western  farmer  and  the  southern 
planter   would   have   been   extremely   happy. 

We  find  also  during  the  same  period  a  decline  of  50 
per  cent,  in  the  price  of  silver,  and  we  are  told  that  this 
decline  in  silver  is  the  cause  of  the  decline  in  wheat  and 
cotton,  and  that  all  we  need  to  restore  the  price  of 
wheat  and  cotton  to  the  price  of  1873  ^^  to  restore  the 
price   of  silver. 

The  stubborn  fact  remains,  however,  that  the  decline 
in  silver  bullion  has  nothing  to  do  with  the  decline  in 
wheat  and  cotton  ;  for  during  all  this  time  the  silver  dol- 
lar has  been  kept  at  parity  with  gold  at  government 
expense,  and  if  the  total  sales  of  wheat  and  cotton  had 
been  paid  for  in  gold  dollars  or  silver  dollars,  it  would 
have  made  no  difference  to  the  farmer  or  the  planter. 

This  shrinkage,  then,  of  $523,218,000  must  be  accounted 
for  in  some  other  way.  Looking  for  the  cause,  we  find 
that  Argentina  in  1892  put  in  the  same  market  25,000,000 
bushels  of  wheat;  in  1893,  45,000,000  bushels;  and  in   1894, 


53 

75,000,000.  We  find,  also,  Egypt,  India,  and  Russia  in  the 
same  market  with  correspondingly  large  crops,  and  this 
enormous  production  forced  down  the  price,  and  the  sil- 
ver crop  had  nothing  to  do  with  it.  Silver  coin  in  point 
of  fact  during  all  this  time  had  the  full  benefit  of  friendly 
legislation  and  the  full  power  of  the  government  to  main- 
tain its  parity  with  gold. 

The  truth  is  that  we  are  in  great  danger  of  losing  our 
foreign  markets  by  means  of  foreign  competition,  and  we 
cannot  meet  that  competition  by  any  change  in  our  mone- 
tary standard.  Great  Britain  will  buy  her  wheat  and  cotton 
where  she  can  buy  it  the  cheapest.  With  the  Liverpool 
merchant  it  is  a  question  of  business  and  not  of  sentiment. 
He  wants  to  know  what  our  dollar  weighs,  and  the  inscrip- 
tion, "  In  God  we  trust,"  is  not  taken  as  evidence  of  com- 
mercial value. 

The  monsoons  of  the  Indian  Ocean  and  cheap  foreign 
labor  have  more  to  do  with  the  price  of  wheat  in  Liverpool 
than  has  the  price  of  silver  in  the  United  vStates. 

How  can  we  protect  our  foreign  markets  against  foreign 
labor  is  a  question  which  cannot  be  answered  by  the  means 
employed  to  protect  our  home  markets  against  the  same 
force. 

The  orators  who  are  so  fond  of  proclaiming  our  inde- 
pendence of  foreign  powers  should  address  themselves  to 
the  duty  of  finding  the  means  by  which  these  same  foreign- 
ers can  be  forced  to  pay  us  double  the  present  price  for  our 
own  products.  Cheap  bread  stuffs  is  the  universal  cry  of 
mankind,  and  the  country  which  can  meet  that  requirement 
best  will  command  the  market  and  fix  the  price. 

We  cannot  legislate  double  price  for  our  silver  product 
any  more  than  we  can  for  our  farm  products.  It  is  simply  a 
question  of  supply  and  demand.  The  nations  of  the  whole 
earth  are  our  competitors,  and  we  cannot  overcome  it  by 
putting  up  the  price  of  our  commodities,  much  less  that  of 
silver,  of  which  they  have  much  more  for  sale  even  now 
than  we  have. 

Prof.    Laughlin   in    his   ''Gold    and    Prices   since    1873," 


54 


gives  many  interesting  facts  which  are  instructive,  as  they 
show  that  for  the  past  twenty-five  years  food  products 
have  increased  faster  than  the  population,  and  this  fact 
has  to  be  considered  in  accounting  for  the  decline  in 
prices  as  measured  by  gold,  as  well  as  the  decreased  cost 
of  production  and  delivery. 


In   1870  acres  planted  to  wheat  in   United  States, 

In  1884  acres  planted  to  wheat  in  United  States, 

In  1870  India  planted  acres  . 

In  1S84  India  planted  acres   . 

In  1870  Europe  planted  acres 

In   1884  Europe  planted  acres 

In  1869-70  European  imports  of  grainf  value 

In  1879  European  imports  of  grain,  value  . 

"in   1873   Rio  coffee  shipped  to  New  York,  totis 

In   1886   Rio  coffee  shipped  to  New  York,  tons 


88,000,000 

157,000,000 

18,000,000 

25,000,000 

440,000,000 

482,000,000 

$409,000,000 

$817,000,000 

68,863 

189,319 


The  general  fall  in  prices  has  been  rashly  attributed 
to  appreciation  in  gold,  when  the  causes  to  be  found  are 
entirely  distinct  from  any  influence  whatever  by  the 
precious  metals.  Increased  cheapness  in  production  and 
distribution  has  brought  an  over-supply,  which  has  had 
its  natural  effect  in  the  markets  of  the  world.  Coinci- 
dences are  too  frequently  magnified  into  original  causes, 
and  time  is  required  to  dispel  the  illusion. 

The  fact  therefore  that  the  decline  in  wheat,  cotton, 
corn,  sugar,  and  silver,  were  contemporaneous  events,  is 
no  more  conclusive  that  the  decline  of  one  has  catised  the 
decline  of  the  other,  than  is  the  large  reduction  of  tonnage 
dues  at  the  Suez  canal,  the  cause  of  a  decline  in  silver, 
while  it  is  a  direct  cause  for  the  decline  of  wheat  in 
Chicago. 

The  causes  for  the  general  decline  in  prices  are  complex, 
world-wide,  and  various.  It  follows,  therefore,  if  this  be 
true,  that  neither  the  reduction  of  gold  to  a  parity  with  sil- 
ver, nor  the  uplifting  of  silver  to  a  parity  with  gold  by  inter- 
national law,  will  necessarily  advance  the  price  of  American 
wheat  and  cotton. 


APPENDIX. 


56 


TABLE  I. 
Com»iercial  Ratio  of  Silver  to  Gold  each    Yeai-  since  i6Sj. 

[Note. —  From  1687  to  1832  the  ratios  are  taken  from  Dr.  A.  Soetbeer  ;  from  18^3 
to  1879  from  Pixley  and  Abell's  tables,  and  from  1879  to  1890  from  daily  cablegrams 
from  London  to  the  Bureau  of  the  Mint.] 


Year. 


Year.   Ratio. 


Year.    Ratio. 


Ratio. 


Year.  Ratio. 


Year.  Ratio. 


1687 

1688 

1689 

1690 

1691 

1692 

1693 

1694 

1693 

1696 

1697 

i6( 

1699 

1700 

1 701 

1702 

1703 

1704 

1705 
1706 
1707 
1708 
1709 
1710 
1711 
1712 

1713 
1714 

1715 
1716 
1717 
1718 
1719 
1720 
1721 


94 
94 
02 
02 
yS 
92 
83 
87 
02 
00 
20 
07 
94 
81 

07 
52 
17 
22 
II 
27 
44 
41 
31 

22 
29 
31 
24 
13 
II 
09 

13 
II 
09 
04 
05 


:722 

:723i 
[724  I 

■725 
:726 

27 
[72S 
729 
1730 
[731 
1732 

;33 

734 

C735 

1736 

[737 

173S 

t739 

[740 

[741 

742 

743 

744 

745 

1746 

1747 
[748 
[749 
[750 

[751 

[752 
1753 
1754 
[755 
1756 


758, 

1759' 
[760 

:76i 
:762 
-63 
764 
765 
[766 

[767 
[768 
.769 
1770 

1771 
[772 

1773 

774 

1775 

[776 

777 

[77S 

79 

[7  So 

781 

;7S2 

783 

■84 

[785 

[786 

t787 

[788 

[789 

'90 

[791 


14.87 
■4.S5 


'792 
t793 
1794 
795 
[796 

1797 
-98 
:799 
rSoo 
[801 
1802 
[803 
[804 
[So. 
[806 
1807 
[808 
[809 
[810 
[811 

t8l2 

t8i3 
t8i4 
[81  = 
[S16 
[817 
\ii 
[819 
[820 
[821 
[S22 
t823 
[824 
[825 
[826 


17 
00 

37 
55 
65 
41 
59 
74 
68 
46 
26 
41 
41 
79 
52 
43 
08 
96 
77 
53 
II 

25 
04 
26 
28 
II 
35 
33 
62 

95 
So 

84 

82 

70 

76 


[827 

[828 
1829 1 

1830 1 
1S3I 

[832 
1833 
C834 
1835 

1836 

1837 
[838 

1839 

[S40 
[841 
[842 

t843 
[844 
1845 
[846 

[847 
[848 

t849 
[850 
[851 
[852 
[853 
[854 
1855 
[856 

[857 
[858 

1859 
[860 
[861 


74 
78 
78 
82 
72 
73 
•93 
73 
80 
72 
83 
85 
.62 
,62 
70 
87 
93 
85 
92 
,90 
So 
85 
73 
70 
,46 
59 
33 
33 
•38 
38 
27 
38 
19 
29 
50 


1862! 
1863: 
1864 
1865  I 
1S66 

S67i 
1S68 
1S69 

870 
1871 
1S72 

1873 
1874 

1875 

1876 

1877 

1878 

1879 

1880 

1881 

1882 

1883 

[884; 

1885 

[8861 

1887! 


[8go 
[891 
[892 

1893 
1894 

■895 

1896 

6  mo. 


5-35 
5-37 
5-37 
5-44 
5-43 
5-57 
5-59 
5.60 

5-57 

5-57 

15-63 

1592 

16.17 

16.59 

17.88 

17.22 

17.94 

18.40 

18.05 

18.16 

8.19 

8.64 

8.57 
9.41 
20.78 
21.13 
21.99 
22.10 
19.76 
20.92 
23.72 
26.49 
32.56 
31-00 
30.32 


57 


TABLE  II. 

The  following  table  exhibits  the  value  of  the  pure  silver  in  a  silver 
dollar,  reckoned  at  the  commercial  price  of  silver  bullion  from  $0.50  to 
$1.2929  (parity),  per  ounce  fine. 


Value  of 

Value  of 

Value  of 

Value  of 

Price  of     pure  sil-       Pric 

e  of 

pure  sil- 

Price of 

pure  sil- 

Price of 

pure  sil- 

silver per  1   ver  in  a     silve 

rper 

ver  in  a 

silver  per 

ver  in  a 

silver  per 

ver  in  a 

fineounce.  silver  dol-  fineoi 

jnce. 

silver  dol 

fineounce. 

silver  dol- 

fineounce. 

silver  dol- 

1 

ar. 

lar. 

lar. 

lar. 

1 
$0.50       $0 

3?7         $0 

7^ 

$0,549 

$0.92 

$0,712 

$1.13 

$0,874 

.51 

394 

72 

•557 

•93 

.719 

1. 14 

.882 

.51 

402 

73 

■565 

•94 

•  727 

I-I5 

.889 

.53 

410 

74 

•572 

•95 

•  735 

1. 16 

•897 

•  54 

418 

75 

•  5S0 

.96 

•  742 

1.17 

•905 

.55 

425 

76 

.5S8 

•97 

•750 

1. 18 

•913 

.56 

433 

77 

•596 

•  98 

•  75S 

1. 19 

.920 

.57 

441 

78 

.603 

•  99 

.766 

1.20 

.928 

■  58 

449 

79 

.611 

1. 00 

•  773 

1. 21 

■936 

•59 

456 

80 

.619 

1. 01 

.781 

1.22 

*    ^944 

.60 

464 

81 

.626 

1.02 

•  789 

1.23 

•951 

.61 

472 

82 

.634 

1.03 

•  797 

1.24 

•959 

.62 

480 

83 

.642 

1.04 

.804 

1-25 

.967 

.63 

487 

84 

.650 

1.05 

.812 

1.26 

•975 

.64 

495 

85 

•  657 

1.06 

.820 

1.27 

.982 

.65 

503 

86 

.665 

1.07 

.828 

1.28 

.990 

.66 

510 

87 

•673 

1.08 

.835 

1.29 

•998 

.67 

518 

88 

.681 

1.09 

.843 

'^1.2929 

1. 000 

.68 

526 

8q 

.688 

1. 10 

.851 

.69 

534 

90 

.696 

I. II 

•  859 

*Parity. 

.70 

541 

91 

.704 

1. 12 

.866 

TABLE  III. 

The  total  redemptions  of  notes  in  gold  and  the  exports  ot  that  metal 
during  each  fiscal  year  since  the  resumption  of  specie  payments  have 
been  as  follows  : 


Fiscal  Year. 


United  States 
notes. 


Treasury 
notes  of  i8qc 


1879 i       $7,976,698 


1880. 
1881. 
1882. 
1883. 
1884. 
1885. 
1886. 
1887. 
1888. 
1889. 
1890. 
1891. 
1892. 
1893. 
1894. 
1895  • 
1896. 


3,780,638, 

271,750 

40,000 

75,000] 

590,000 

2,222,000 

6,863,6991 

4,224,073' 

692,596! 

730,143 

732,386 

5,986,070 

5-352,243 

55,319,125 

68,242,408 

109,783,800 

153.307.591 


Total I  $426,190,220 


$3,773,600 

46,781,220 

16,599,742 

7,570.398 

5.348.365 


,073.325 


Total. 


Exports  of 
gold. 


$7,976,698 

3.780,638 

271,750 

40,000 

75,000 

590,000 

2,222,000 

6,863,699! 

4.224,073j 

692,596j 

730,143 

732,386 

5,986,070 

9,125,843 

102,100,345 

84,842,150 

117,354,198 

158,655.956 


$4,587,614 

3,639,025 

2,565,132 

32,587,880 

11,600,888 

41.081,957 

8,477.892 

42,952,191 

9,701,187 

18,376,234 

59,952,285 

17,274,491 

86,362,654 

50,195,327 

108,680,844 

76,978,061 

66,131,183 

112,309,186 


$506,263,545  $753,453,981 


58 


TABLE  IV. 

The  following  tables  e.xhibit  the  amount  and  cost  of  silver  bullion  pur- 
chased each  year  under  the  acts  of  February  28,  1878,  and  July  14,  1890, 
the  average  price  paid,  and  the  bullion  value  of  the  standard  silver  dollar: 


Amount,  Cost,  Average  Price,  and  Bullion  value  of  the  Silver  Dol- 
lar of  Silver  purchased  under  act  of  February  28,  iSjS. 


Average 

Bullion 

Fiscal  Year. 

Fine  ounces. 

Cost. 

price  per 
fine  ounce. 

value  of  a 
silverd  liar. 

1878, 

10*809,350.58 

$13,023,268.96 

$1.2048 

$09318 

1879 

19,248,086.09 

21,593,642.99 

1.1218 

.8676 

1880 

22,057,862.64 

25,235,081.53 

1.1440 

.8848 

1881 

19,709,227.11 

22,327,874.75 

I. 1328 

.8761 

1882 

21,190,200.87 

24,054,480  47 

I-I35I 

•8779 

1883 

22,889,241.24 

25.577.327-58 

I.I174 

.S642 

1884 

21,922,951.52 

24,378,383-91 

1.1120 

.8600 

1885 

21,791,171.61 

23,747,460.25 

1.0897 

.8428 

1886 

22,690,652.94 

23,448,960.01 

1-0334 

.7992 

1887 

26,490,008.04 

25,988,620.46 

.9810 

■75S7 

1888 

25,386,125.32 

24,237.553-20 

•9547 

•7384 

1889 

26,468,861.03 

24,717,853.81 

.9338 

.7222 

1890 

27,820,900.05 

26,899,326.33 

.966S 

•  7477 

1891 

2.797.379-52 

3,049,426.46 

1. 0901 

.8431 

Tota 

l1, 

291,272,018.56 

308,279,260.71 

1-0583 

.S185 

TABLE   V. 

Amount,  Cost,  Average  Price,  a)td  Bullion  Value  of  the  Silver  Dol- 
lar of  Silver  purchased  under  act  of  July  i^,  i8go. 


Fiscal  Year. 

Fine  ounces. 

Cost. 

Average 
Price  per 
fine  ounce. 

Bullion 
value  of  a 
silverdollar. 

1891, 
1892, 

1893,  . 

1894,  . 

48,393,113.05 
54.355.748.10 
54,008,162.60 
11,917,658.78 

$50,577,498-44 
51,106,607.96 

45.531.374-53 
8,715,521.32 

$1.0451 
.9402 
.8430 
•7313 

$0.8083 
.7271 
.6520 
.5656 

Total,      . 

168,674,682.53 

155,931,002.25 

•9244 

.7150 

Total  cost  purchases  under  both  acts,  $464,210,262.96. 


59 


TABLE  VI. 

[Senate  Mis.  Doc.  No.  36,  Fifty-third  Congress,  first  session.] 
Production  of  Gold  and  Silver  in  the  World,  ijg2-iSg2. 


Silver  (coining 

Calendar  years. 

■  Gold. 

value). 

i7g2-iSoo,  . 

$106,407,000 

$328,860,000 

1801-1810,  . 

118,152,000 

371,667,000 

1811-1820,  . 

76,063,000 

224,786,000 

1821-1S30,  . 

94,479,000 

191,444,000 

1831-1840,  . 

134,841,000 

247,930,000 

1841-1848,  . 

291,144,000 

259,520,000 

1849,  . 

27,100,000 

39,000,000 

1850,  . 

44,450,000 

39,000,000 

1851,  . 

67,600,000 

45,000,000 

1852,  . 

132,750,000 

40,600,000 

1853.  • 

155,450,000 

40,600,000 

1854-  • 

127,450,000 

40,600,000 

1855,  • 

135,075,000 

40,600,000 

1856,  . 

147,600,000 

40,650,000 

1857.  • 

133,275,000 

40,650,000 

1858,  . 

124,650,000 

40,650,000 

1859,  ■ 

124,850,000 

40,750,000 

i860,  . 

119,250,000 

40,800,000 

1861,  . 

113,800,000 

44,700,000 

1862,  . 

107,750,000 

45,200,000 

1863, 

106,950,000 

49,200,000 

1864,  . 

113,000,000 

51,700,000 

1865,  . 

120,200,000 

51,950,000 

1866,  . 

121,100,000 

50,750,000 

1867.  . 

104,025,000 

54,225,000 

1868,  . 

109,725,000 

50,225,000 

1869,  . 

106,225,000 

47,500,000 

1870, 

106,850,000 

51,575,000 

1871, 

107,000,000 

61,050,000 

1872, 

99,600,000 

65,250,000 

1873- 

96,200,000 

81,800,000 

1874, 

99,750,000 

71,500,000 

1875. 

97,500,000 

80,500,000 

1876, 

103,700,000 

87,600,000 

1877, 

114,000,000 

81,000,000 

1878, 

119,000,000 

95,000,000 

1879, 

109,000,000 

96,000,000 

1880, 

106,500,000 

96,700,000 

1881, 

103,000,000 

102,000,000 

1882, 

102,000,000 

111,800,000 

1883, 

95,400,000 

115,300,000 

1884, 

101,700,000 

105,500,000 

1885, 

108,400,000 

118,500,000 

1886, 

106,000,000 

120,600,000 

1887, 

105,775,000 

124,281,000 

1888, 

110,197,000 

140,706,000 

1889, 

123,489,000 

162,159,000 

1890, 

113,150,000 

172,235,000 

1891, 

120,519,000 

186,733,000 

1892, 

130,817,000 

196,105,000 

T 

3tal, 

• 

] 

5,633,908,000 

5,077,961,000 

6o 


TABLE  VII. 

The  silver  product  is  given  at  its  commercial  value,  reckoned 
at  the  average  market  price  of  silver  each  year,  as  well  as  its 
coining  value  in  United  States  dollars. 

P}-oducf  of  gold  and  silver  front  mines  in  the  United  States, 
j873-iSgs. 


Gold. 

Silver. 

Calendar 
year. 

Fine 
ounces. 

Value. 

Fine 
ounces. 

Commercial 

value. 

Coining  value. 

1873.   • 

1,741,500 

$36,000,000 

27,650,000 

$35,890,000 

$35,750,000 

1874 

1,620,563 

33,500,000 

28,849,000 

36,869,000 

37,300,000 

1875 

1,615,725 

33,400,000 

24,518,000 

30,549,000 

31,700,000 

1S76 

1,930,162 

39,900,000 

30,009,000 

34,690,000 

38,800,000 

1877 

2,268,788 

46,900,000 

30,783,000 

36,970,000 

39,800,000 

1878 

2,476,800 

51,200,000 

34,960,000 

40,270,000 

45,200,000 

1879 

1,881,787 

38,900,000 

31,550,000 

35,430,000 

40,800,000 

1880 

1,741,500 

36,000,000 

30,320,000 

34,720,000 

39,200,000 

1881 

1,678,612 

34,700,000 

33,260,000 

37,850,000 

43,000,000 

1882 

1.572,187 

32,500,000 

36,200,000 

41,120,000 

46,800,000 

1883 

1,451,250 

30,000,000 

35,730,000 

39,660,000 

46,200,000 

1884 

1,489,950 

30,800,000 

37,800,000 

42,070,000 

48,800,000 

1885 

1,538,325 

31,800,000 

39,910,000 

42,500,000 

51,600,000 

1886 

1,693,125 

35,000,000 

39,440,000 

39,230,000 

51,000,000 

1887 

1,596,375 

33,000,000 

41,200,000 

40,410,000 

53,350,000 

1888 

1,604,841 

33,175,000 

45,780,000 

43,020,000 

59,195,000 

1889 

1,587,000 

32,800,000 

50,000,000 

46,750,000 

64,646,000 

i8go 

1,588,880 

32,845,000 

54,500,000 

57,225,000 

70,465,000 

i8qi 

1,604,840 

33,175,000 

58,330,000 

57,630,000 

75,417,000 

1892 

1,596,375 

33,000,000 

63,500,000 

55,563,000 

82,101,000 

1893 

1,739,323 

35,955,000 

60,000,000 

46,800,000 

77,576,000 

1894 

1,910,813 

39,500,000 

49,500,000 

31,422,000 

64,000,000 

1895 

2,254,760 

46,610,000 

55,727,000 

36,445,000 

72,051,000 

Total,  . 

40,183,481 

$830,660,000 

939,576,000 

$943,083,000 

$1,214,751,000 

6i 


TABLE   VIII. 

Product  of  gold  and  silver  in  the  United  States  from  i'jg2  to  1844,  and 

au7iually  since. 

[The  estimate   for   1792-1873   is  by  R.  W.   Raymond,  Commissioner,  and  since  by 
Director  of  the  Mint.) 


Year. 

Ratio. 

Gold. 

Silver. 

Total. 

April 2,  I792-Julv3^  1S34, 

$14,000,000 

Insignificant. 

$14,000,000 

July  31,  i834-Uec.3i,  i^S44, 

7,500,000 

$250,000 

7,750,000 

1845,   .... 

15 

92 

1,008,327 

50,000 

1,058,327 

1846 

15 

90 

I-139.357 

50,000 

1,189,357 

1847 

15 

80 

889,085 

50,000 

939,085 

1848 

15 

85 

10,000,000 

50,000 

10,050,000 

1849 

15 

78 

40,000,000 

50,000 

40,050,000 

1850 

15 

70 

50,000,000 

50,000 

50,050,000 

1851 

15 

46 

55,000,000 

50,000 

55,050,000 

1852 

15 

49 

60,000,000 

50,000 

60,050,000 

1853 

15 

33 

65,000,000 

50,000 

65,050,000 

1854 

15 

33 

60,000,000 

50,000 

60,050,000 

1855 

15 

38 

55,000,000 

50,000 

55,050,000 

1856 

15 

38 

55,000,000 

50,000 

55,050,000 

1857 

15 

27 

55,000,000 

50,000 

55,050,000 

1858 

15 

38 

50,000,000 

500,000 

50,500,000 

1859 

15 

19 

50,000,000 

100,000 

50,100,000 

i860 

15 

29 

46,000,000 

150,000 

46,150,000 

1861 

15 

50 

43,000,000 

2,000,000 

45,000,000 

1862 

15 

35 

39,200,000 

4,500,000 

43,700,000 

1863 

15 

37 

40,000,000 

8,500,000 

48,500,000 

1864 

15 

37 

46,ioo,ouo 

11,000,000 

57,100,000 

1865 

15 

44 

53,225,000 

11,250,000 

64,475,000 

1866 

15 

43 

53,500,000 

10,000,000 

63,500,000 

1867 

15 

57 

51,725,000 

13,500,000 

65,225,000 

1868 

15 

59 

48,030,000 

12,000,000 

60,000,000 

1869 

15 

60 

49,500,000 

12,000,000 

61,500,000 

1870 

15 

57 

50,000,000 

16,000,000 

66,000,000 

1871 

15 

57 

43,500,000 

23,000.000 

66,500,000 

1872 

15 

63 

36,000,000 

28,750,000 

64,750,000 

1873 

15 

92 

36,000,000 

35,750,000 

71,750,000 

1874 

16 

17 

33,500,000 

37,300,000 

70,800,000 

1875 

16 

59 

33,400,000 

31,700,000 

65,100,000 

1876 

17 

88 

39,900,000 

38,800,000 

78,700,000 

1877 

17 

22 

46,900,000 

39,800,000 

86,700,000 

1878 

17 

94 

51,200,000 

45,200,000 

96,400,000 

3879 

[8 

40 

38,900,000 

40,800,000 

79,700,000 

1880 

18 

OC 

36,000,000 

39,200,000 

75,200,000 

1881 

18 

16 

34,700,000 

43,000,000 

77,700,000 

1882 

18 

19 

32,500,000 

46,800,000 

79,300,000 

1883 

18 

64 

30,000,000 

46,200,000 

76,200,000 

1884 

18 

57 

30,800,000 

48,800,000 

79,600,000 

1885 

19 

41 

31,800,000 

51,600,000 

83,400,000 

1886 

20 

78 

35,000,000 

51,000,000 

86,000,000 

1887 

21 

13 

33,000,000 

53,350,000 

86,350,000 

1888 

21 

99 

33,175,000 

59,195,000 

92,370,000 

1889 

22 

10 

32,800,000 

64,646,000 

97,446,000 

1890 

19 

76 

32,845,000 

70,465,000 

103,310,000 

1891 

20 

92 

33,175,000 

75,417,000 

108,592,000 

1892 

23 

72 

33,000,000 

82,101,000 

115,101,000 

1893 

26 

49 

35,955,000 

77,576,000 

113,531,000 

1894 

32 

56 

39,500,000 

64,000,000 

103,500,000 

1895 

31 

60 

46,610,000 

72,051,00c 

118,661,000 

1896 

(6  mos.) 

30 

32 

Total, 

$2,059,946,769 

$1,368,901,000 

$3,428,847,769 

62 


TABLE  IX. 

Statement  of  the  coin  and  paper  cz'rcula/wn  of  the   United  States 
from  iS6o  to  iSg6,  inclusive,  with  amount  of  circulation  per  capita. 


Coin  in 

United 

States, 

including 

bullion  in 

Treasury. 

Paper 

money 

in  United 

States. 

Total 
money. 

Coin,  bul- 
lion, and 

paper 
money  in 

Treas- 
ury. 

Circula-     Popula- 
tion,           tion. 

Money 

in 
United 
States 

per 
capita. 

Circu- 
lation 

per 
capita. 

i860 

$235,000,000 

$207,102,477 

$442,102,477  $6,695,225 

1 
$435,407,25231,443,321 

$14.06 

$13.85 

1861 

250,000,000 

202,005,767 

452,005,767 

3,6oo,oool    448,405,76732,064,000 

14.09 

13.98 

1862 

25,000,000 

333,452,079 

358,452,079 

23,754,335 

334,697,74432,704,000 

10.96 

10.23 

1863 

25,000,000 

649,867,283 

674,867,283 

79,473,245 

595,394.03833.365,000 

20.23 

17.84 

1864 

25,000,000 

680,588,067 

705,588,067 

35,946,589 

669,641 ,478  34,046,000 

20.72 

19.67 

1865 

25,000,000 

745. 129.755 

770,129,755 

55.426,760 

714,702,99534,748,000 

22.16 

20.57 

1866 

25,000,000 

729,327,254 

754.327.254 

80,839,010 

673,488,24435,469,000 

21.27 

18.99 

1867 

25,000,000 

703,200,612 

728,200,612 

66,208,543 

661,992,069  36,211,000 

20.11 

18.28 

1868 

25,000,000 

691,553.578 

716,553.578 

36,449,917 

680,103,661136,973,000 

19.38 

18.39 

1869 

25,000,000 

690,351,180 

715,351,180 

50,898,289 

664,452,891  37,756,000 

18.9s 

17.60 

1870 

25,000,000 

697,868,461 

722,868,461 

47,655,667 

675,212,79438,558,371 

18.73 

17-50 

1871 

25,000,000 

716,812,174 

■741,812,174 

25,923,169 

7'5.889.oo5|39, 555,000 

18.75 

18.10 

1872 

25,000,000 

737.721,565 

762,721,565 

24,412,016 

738,309,54940,596,000 

18.70 

18.19 

1873 

25,000,000 

749.445.610 

774,445.610 

22,563,801 

751,881,809,41,677,000 

18.58 

18.04 

1874 

25,000,000 

781,024,781 

806,024,781 

29,941,750 

776,083,031 

42,796,000 

18.83 

18.13 

1875 

25,000,000 

773.273.509 

798,273,509 

44,171,562 

754,101,947 

43,951,000 

18.16 

17.16 

1876 

52,418,734 

738,264,550 

790,683,284 

63,073,896 

727,609,388 

45,137,000 

17.52 

16.12 

1877 

65.837.506 

697,216,341 

763,053,847 

40,738,964 

722,3x4,883 

46,353,000 

16.46 

15-58 

1878 

102,047,907 

68(5,205,669 

791.253,576 

62,120,942 

729,132,634 

47,598,000 

16.62 

15-32 

1879 

357,268,178 

694.253.363 

1,051,521,541 

232,889,748 

818,631,793 

48,866,000 

21.52 

16.75 

1880 

494,363,884 

711,565,313 

1,205,929,197 

232,546,969 

973,382,228 

50,155,783 

24.04 

19.41 

1881 

647,868,682 

758,673,141 

1,406,541,823 

292,303,704 

1,114,238,11951,316,000 

27.41 

21.71 

1882 

703,974,839 

776,556,880 

1.480,531.719 

306,241,300  1,174,290,419  52,495,000 

28.20 

22.37 

1883 

769,740,048 

873.749.768 

1,643,489,816 

413,184,120  1,230,305,696 

53,693,000 

30.60 

22  91 

1884 

801,068,939 

904,385,250 

1,705,454,189 

461,528,2201,243,925,969 

54,911,000 

31.06 

22.65 

1885 

872,175,823 

945.482,513 

1,817,658,336 

525,089,721 

1,292,568,615 

56,148,000 

32.37 

23.02 

1886 

903,027,304 

905.532.390 

1,808,559,694 

555,859,160 

1,252,700,525 

57,404,000 

31-50 

21.82 

1887 

1,007,513,901 

892,928,77. 

1,900,442,672 

582,903,529 

1,317.539. '43 

58,680,000 

32-39 

22.45 

1888 

1,092,391,690 

970,564,259 

2,062,955,949 

690,785,070 

1,372,170,870 

59,974,000 

34-39 

22.88 

1889 

1,100,612,434 

974.738,277 

2,075,350,7" 

694,989,062 

1,380,361,649 

61,289,000 

33.86 

22.52 

1890 

1,152,471,638 

991. 754.521 

2,144,226,159 

714,974,889 

1,429,251,270 

62,622,250 

34  24 

22.82 

189 1 

1,163,185,054 

1,032,039,021 

2,195,224,075 

697,783,368 

1.497.440,707 

63.975.000 

34-31 

23-41 

1892 

1,232,854,331 

1,139.745.170 

2,372,599,501 

771,252,314 

1,601,347,187 

65,520,000 

36.21 

24.44 

18931,213,413,584 

1,109,988,808 

2,323,402,392 

726,701,147 

1,596,701,245 

66,946,000 

34-70 

23-85 

18941,251,543,158 

1,168,801,62^ 

2,420,434,781 

759,626,073 

1,660,808,708 

68,397,000 

35-39 

24.28 

1895  1,260,987,506 

I,  I37,6i9,9i4!2, 398, 607,420 

796.638,947 

1,601,968,473  69,878,000 

34-33 

2293 

1896  1,225,618,792 

i,iio,oi2,536|2,345,63i,328 

839,000,302 

1,506,631,026171,390,000 

32.86 

21. 10 

Note  i.  —Specie  payments  were  suspended  from  January  i,  1862,  to  January  i, 
1879.  During  the  greater  part  of  that  period  gold  and  silver  coins  were  not  in  circu- 
lation except  on  the  Pacific  Coast,  where,  it  is  estimated,  the  specie  circulation  was 
generally  about  $25,ock>,ooo.  This  estimated  amount  is  the  only  coin  included  in  the 
above  statement  from  1862  to  1875,  inclusive. 

Note  2. —  In  1876  subsidiary  silver  again  came  into  use,  and  is  included  in  this 
statement,  beginning  with  that  year. 

Note  3.  — The  coinage  of  standard  silver  dollars  began  in  1878  under  the  act  of 
February  28,  1878. 

Note  4.  — Specie  payments  were  resumed  January  i,  1879,  and  all  gold  and  silver 
coins,  as  well  as  gold  and  silver  bullion  in  the  Treasury,  are  included  in  this  state- 
ment from  and  after  that  date. 

Note  5.  — This  table  represents  the  circulation  of  the  United  States  as  shown  by 
the  revised  statements  of  the  Treasury  Department  for  June  30  of  each  of  the  years 
specified. 


63 

EXPLANATION  OF  THE  TABLES. 

Table  i  shows  the  changes  in  the  commercial  ratio  of 
Silver  to  Gold  from  16S7  to  1896  inclusive,  210  years.  In 
1687  14.94  ounces  of  silver  was  the  equivalent  of  one  ounce 
of  gold.  In  1896  30.32  ounces  of  silver  is  required  to  pur- 
chase one  ounce  of  gold.  Has  the  purchasing  power  of 
silver  decreased,  or  the  exchange  value  of  gold  increased  1 

TABLE  III. 

This  table  shows  that  when  specie  payments  were  re- 
sumed on  the  ist  of  January,  1879,  public  confidence  was  so 
great  in  the  outstanding  paper  issues  of  the  United  States, 
that,  although  the  treasury  was  provided  with  $135,000,000  of 
gold,  only  $7,976,698  were  presented  for  redemption  during 
the  balance  of  the  fiscal  year.  It  shows  also,  that  the  silver 
fright  in  1896  sent  in  no  less  than  $158,655,956  for  redemp- 
tion in  about  the  same  time. 

TABLES  IV  AND  V 

Show  the  cost  of  silver  purchased  under  the  Acts  of  1878 
and  1890,  $464,210,262.96  and  which  to-day  is  not  worth  one- 
half  the  cost. 

TABLE  VI 

Shows  the  world's  total  product  of  gold  and  silver  for  one 
hundred  years,    1792    to    1S92,    the   difference    being  only 

$5,559,470- 

TABLE  VII 

Product  of  gold  and  silver  from  the  mines  in  the  United 
States  from  1873  to  1895. 

TABLE  VIII 

Product  of  gold  and  silver  in  the  United  vStates  from  1792 
to  1896,  showing  the  annual  increase  in  volume. 

TABLE  IX 

Shows  the  amount  and  kind  of  currency  and  bullion  in  the 
United  States,  the  amount  in  circulation  per  capita,  and  the 
amount  in  reserve. 


64 

[From  Treasury  Documents.] 

SUMMARY  OF  MONETARY  EVENTS  SINCE   1786. 

Ij86. —  Establishment  of  the  double  standard  in  the  United 
States  with  a  ratio  of  i  to  15.25;  that  is,  on  the  basis  of  123.134 
gfrains  of  fine  gold  for  the  half  eagle,  or  85  piece,  and  375.64  grains 
of  fine  silver  for  the  dollar,  without  any  actual  coinage. 

I7g2. —  Adoption  of  the  ratio  of  i  to  1 5  and  establishment  of 
a  mint  with  free  and  gratuitous  coinage  in  the  United  States;  the 
silver  dollar  equal  to  37I/4  grains  fine,  the  eagle  to  247  ><  grains 
fine. 

iSoj. —  Establishment  of  the  double  standard  in  France  on 
the  basis  of  the  ratio  of  i  to  1 5 ><,  notwithstanding  the  fact  that 
the  market  ratio  was  then  about  i  to  1 5. 

1810. — Introduction  of  the  silver  standard  in  Russia  on  the 
basis  of  the  ruble  of  17.99  grams  of  fine  silver,  followed  in  1871  by 
the  coinage  of  imperials,  or  gold  pieces  of  5  rubles,  of  5.998  grams; 
therefore,  with  a  ratio  of  i  to  15.  This  ratio  was  changed  by  the 
increase  of  the  imperial  to  5  rubles  1 5  copecks,  and  later  to   i  to 

15.45. 

1813. —  Great  depreciation  of  paper  money  in  England,  reach- 
ing 26X  per  cent,  in  May.  Cost  of  gold,  /;5  6s.,  and  of  silver, 
71)4(1.  per  ounce  standard.  In  December  the  loss  was  only  6 
percent.;  gold  at  this  period  was  quoted  at  ^4  3s.,  and  silver  at 
64d. 

1816. — Abolition  of  the  double  standard  in  England,  which 
had  had  as  its  basis  the  ratio  of  i  to  15.21,  and  adoption  of  the 
gold  standard  on  the  basis  of  the  pound  sterling  at  7.322  grams  fine 
in  weight. 

Coinage  of  divisional  money  at  the  rate  of  66d.  per  ounce. 
Extreme  prices,  £4.  2s.  for  gold  and  64d.  for  silver;  in  January,  £i 
1 8s.  6d.,  and  59X  in  December 

18/6. —  Substitution  for  the  ratio  of  i  to  15.5  in  Holland,  estab- 
lished by  a  rather  confused  coinage,  of  the  ratio  of  i  to  15  J^. 

/8/(^. —  AboHtion  of  forced  currency  in  England.  Price  of  gold 
£2  17s.  10;^ d.,  and  of  silver,  62d.*  per  ounce  in  October,  against 
£4  IS.  6d.  and  67d.  in  February. 

/c?j2.— Introduction  of  the  monetary  system  of  France  into 
Belgium,  with  a  decree  providing  for  the  coinage  of  pieces  of  20 
and  40  francs,  which,  however,  were  not  stamped.     Silver,  59^4  d. 


*The  price  of  silver  giVen  hereafter  represents  the  average  rate  per  ounce 
standard  — that  is,  the  mean  between  the  highest  price  and  the  lowest  price 
quoted  during  the  year. 


65 

l8j4- — Substitution  of  the  ratio  of  i  to  i6  for  that  of  i  to  15  in 
the  United  States  by  reducing  the  weight  of  the  eagle,  ten-dollar 
gold-piece,  from  270  grains  to  258  grains. 

In  1837  the  fineness  of  the  United  States  gold  coins  was  raised 
from  .899225  to  .900,  and  the  silver  coins  from  .8924  to  .900,  giving 
a  ratio  of  i  to  15.988  and  fixing  the  standard  weight  of  the  silver 
cor.ar  at  4i2>^  grains.     Silver  .59-i5/i6d. 

i8j6. —  Introduction  of  the  company  rupee,  a  piece  of  silver 
weighing  165  grains  fine,  in  India  in  place  of  the  sicca  rupee. 
Creation  of  a  trade  coin  —  the  mohur,  or  piece  of  1 5  rupees  —  con- 
taining 165  grains  of  fine  gold.     Silver,  59T^d. 

1S44. —  Introduction  of  the  double  standard  in  Turkey,  with 
the  ratio  of  i  to  15.10.     Silver  59J'2d. 

1S4J. —  Abolition  of  the  double  standard  in  Holland  by  the  in- 
troduction of  the  silver  standard  on  the  basis  of  a  i-fiorin  piece 
0.945  grams  fine,  the  coinage  of  which  had  already  been  decreed 
in  1839.     Silver,  59xgd. 

1841. —  Discovery  of  the  gold  mines  of  California. 

1848. —  Coinage  in  Belgium  of  pieces  of  10  and  25  francs  in 
gold,  a  shade  too  light.  These  pieces  were  demonetized  and  with- 
drawn from  circulation  in  1884.     Silver,  59^^. 

1848. —  Replacing  the  ratio  of  i  to  16  in  Spain,  which  had  been 
in  force  since   1786,  by  that  of  i  to  15.77. 

18^0.  —  Introduction  of  the  French  monetary  system  in  Switzer- 
land without  any  actual  coinage  of  gold  pieces.     Silver,  60('gd. 

i8ji. —  Discovery  of  the  gold  mines  of  Australia. 

183J. —  Lowering  of  the  weight  of  silver  pieces  of  less  value 
than  Si  to  the  extent  of  7  per  cent,  in  the  United  States,  and  lim- 
itation of  their  legal  tender  power  to  $5.     Silver,  61  'i'd. 

i8^j. —  Maximum  of  the  production  of  gold  reached  in  Califoi"- 
nia,  when  it  amounted  to  $65,000,000. 

1834. —  Introduction  of  the  gold  standard  in  Portugal  on  the 
basis  of  the  crown  of  16.257  grams  fine.  Before  this  period  the 
country  had  the  silver  standard,  with  a  rather  large  circulation  of 
gold  coins  stamped  on  the  basis  of  i  to  i5>-2  in  1835  ^-^^d  i  to  16;^ 
in  1847.     Silver,  6i>^d. 

1834.^  Modification  of  the  ratio  of  i  to  15.77  in  Spain  by  rais- 
ing it  to  I  to  15.48,  and  by  lowering  the  piaster  from  23.49  grams 
to  23.36  grams  fine. 

1834. —  Introduction  of  the  silver  standard,  as  it  existed  in  the 
mother  country,  in  Java,  in  place  of  the  ideal  Javanese  money, 
and  coinage  of  colonial  silver  pieces. 
5 


66 

i8j7. —  Conclusion  of  a  monetar}'  treaty  between  Austria  and 
the  German  States,  in  accordance  with  which  i  pound  of  fine  sil- 
ver (one-half  a  kilogram)  was  stamped  into  30  thalers  or  52 >^ 
florins  of  south  'Germany,  or  45  Austrian  florins,  resultins^  in  i 
thaler  equaling  1 34  German  florins  or  lYz  Austrian  florins.  Sil- 
ver, (i\)idi. 

1861. —  Law  decreeing  the  coinage  of  gold  pieces  of  10  and  20 
francs  exactly  equal  to  French  coins  of  the  same  denomination  i.i 
Belgium.     Silver,  6i)4^d. 

1S62. —  Adoption  of  the  French  monetary  system  by  Italy. 
Silver,  6i,"gd. 

i86_5. —  Formation  of  the  Latin  Union  between  France,  Bel- 
gium, Switzerland,  and  Italy  on  the  basis  of  a  ratio  of  i  to  \S%- 
Silver,  6i,igd. 

j868. —  Adoption  of  the  French  monetary  system  by  Roumania 
with  the  exclusion  of  the  5-franc  silver  piece,  which  was,  however, 
stamped  in  1881  and  1S83.     Silver,  6o>2d. 

186S. —  Admission  of  Greece  into  the  Latin  Union.  The  defin- 
ite a-nd  universal  introduction  of  the  French  monetary  system  into 
the  country  was  effected  only  in  1883. 

1S6S. —  Adoption  of  the  French  monetary  system,  with  the 
peseta  or  franc  as  the  unit,  by  Spain.  The  coinage  of  gold  al- 
phonses  d'or  of  25  pesetas  was  made  only  in  1876. 

187J. —  Replacing  of  the  silver  standard  in  Germany  by  the 
gold  standard.  Coinage  in  1873  of  gold  pieces  of  5,  10,  and  20 
mark  pieces,  the  latter  weighing  7.168  grams  fine.     Silver,  6o>2d. 

iSyi.—  Establishment  of  the  double  standard  in  Japan  with  the 
ratio  of  i  to  16.17  by  the  coinage  of  the  gold  yen  of  1.667  grams 
and  of  the  silver  yen  of  26.956  grams,  both  with  a  fineness  of 
o.  900. 

iSyj. —  Increase  of  the  intrinsic  value  of  the  subsidiary  coins  of 
the  United  States.  Replacing  of  the  double  standard  by  the  gold 
standard.  Reduction  of  the  cost  of  coinage  of  gold  to  one-fifth 
per  cent.,  the  total  abolition  of  which  charge  was  decreed  in  1875. 
Creation  of  a  trade  dollar  of  420  grains  with  a  fineness  of  0.900. 
Silver,  59>4d. 

i8jj. —  Suspension  of  the  coinage  of  5-franc  pieces  in  Belgium. 

i8jj. —  Limitation  of  the  coinage  of  5-francs  on  individual 
account  in  France. 

iSjj. —  Suspension  of  the  coinage  of  silver  in  Holland. 

1 87 J. —  Formation  of  the  Scandinavian  Monetary  LTnion.  Re- 
placing of  the  silver  standard  in  Denmark,  Sweden,  and  Norway 


6/. 

by  that  of  gold  on  the  basis  of  the  ki'one.  Coinage  of  pieces  of  lo 
and  20  kroner,  the  later  weighing  8.961  grams,  with  a  fineness  of 
o  900. 

i8j4. —  Introduction  of  the  system  of  contingents  for  the  coin- 
age of  5-franc  silver  pieces  in  the  Latin  Union.     Silver,  58,^gd. 

iS'/j. —  Suspension  of  the  coinage  of  silver  on  individual  ac- 
count in  Italy.     Silver,  56j^d. 

iSj^. —  Suspension  of  the  coinage  of  silver  on  account  of  the 
Dutch  colonies. 

i8j^. —  Introduction  of  the  double  standard  in  Holland  on  the 
basis  of  the  ratio  of  i  to  15.62  by  the  creation  of  a  gold  piece  of  10 
florins,  weighing  5.048  grams  fine,  with  the  maintenance  of  the 
suspension  of  the  coinage  of  silver. 

i8j6. —  Great  fluctuations  in  the  price  of  silver,  which  declined 
to  463:(d.,  representing  the  ratio  of  i  to  20. 172,  in  July.  Recovery, 
in  December,  to  58;4d.     Average  pi-ice,  523^' d. 

iSjj. —  Coinage  of  5-franc  silver  pieces  by  Spain  continued 
later,  notwithstanding  the  decline  of  silver  in  the  market.  Silver, 
54>4"d. 

i8jj. —  Replacing  of  the  double  standard  in  Finland  by  that  of 
gold  on  the  basis  of  the  mark  or  franc. 

1878. —  Act  of  United  States  Congress  providing  for  the  pur- 
chase, from  time  to  time,  of  silver  bullion,  at  the  market  price 
thereof,  of  not  less  than  $2,000,000  worth  per  month  as  a  minimum, 
nor  more  than  $4,000,000  worth  per  month  as  a  maximum,  and  its 
coinage  as  fast  as  purchased  into  silver  dollars  of  4i2>2  grains. 
The  coinage  of  silver  on  private  account  prohibited.  Silver, 
52,\d. 

i8j8. —  Meeting  of  the  first  international  monetary  conference 
in  Paris.     Prolongation  of  the  Latin  Union  to  January  i,  1886. 

i87g. —  Suspension  of  the  sales  of  silver  by  Germany.  Silver, 
51  "id. 

18S1.—  Second  international  monetary  conference  in  Paris. 
0  A-er,  Siy^d. 

iSS_5.  —  Introduction  of  the  double  standard  in  Egyyt.  Silver, 
4S>Hd. 

iSS^. —  Prolongation  of  the  Latin  Union  to  January  1,  1891. 

1886.—  Great  decline  in  the  price  of  silver,  which  fell  in  August 
to  42d.,  representing  a  ratio  of  i  to  22.5,  and  recovery,  in  Decem- 
ber, to  46d.  Modification  of  the  coinage  of  gold  and  silver  pieces 
in  Russia.     Silver,  45>^d. 

i88y.—  Retirement  of  the  trade  dollars  by  the  Government  of 


68 

the  United  States  in  ]\Iarch.  Demonetization  of  the  Spanish  pias- 
ters, known  as  Ferdinand  Carolus,  whose  reimbursement  at  the 
rate  of  5  pesetas  ended  on  March  11.  Xew  decHne  of  silver  in 
March  to  44d.,  representing  the  ratio  of  i  to  21.43.     Silver,  44>!5d. 

iSgo. —  United  States — Repeal  of  the  act  of  February  28,  1878, 
commonly  known  as  Bland-Allison  law,  and  substitution  of  author- 
ity for  purchase  of  4,500,000  fine  ounces  of  silver  each  month  to  be 
paid  for  by  issue  of  Treasury  notes  payable  in  coin.  (Act  of  July 
14,  1890.)  Demonetization  of  25,000,000  lei  in  pieces  of  5  lei 
in  Roumania  in  consequence  of  the  introduction  of  the  gold  stand- 
ard by  the  law  of  October  27th.     Silver.  47|^d. 

i8gi. —  Introduction  of  the  French  monetary  system  in  Tunis 
on  the  basis  of  the  gold  standard.  Coinage  of  national  gold  coins 
and  bullion.     .Silver,  45i'6<^^- 

iSg2. —  Replacing  of  the  silver  standard  in  Austria-Hungary  by 
that  of  gold  by  the  law  of  August  2.  Coinage  of  pieces  of  20 
crowns,  containing  6.090  grams  fine.  The  crown  equals  one-half 
florin.  Meeting  of  the  third  international  monetary  conference  at 
Brussels.  Production  of  gold  reaches  its  maximum,  varying  be- 
tween 675,000,000  and  734,000,000  francs.     Silver,  39||d. 

i8g3. —  Suspension  of  the  coinage  of  silver  in  British  India  and 
of  French  trade  dollars  on  individual  account.  Panic  in  the  silver 
market  in  July  in  London,  when  the  price  fell  below  3od.,  repre- 
senting the  ratio  of  i  to  31.43.  Repeal  of  the  purchasing  clause  of 
the  act  of  July  14,  1890,  by  the  Congress  of  the  United  States. 

iSgj. —  Adoption  of  the  gold  standard  by  Chile. 

iSgs. —  Russia  decides  to  coin  100.000,000  gold  rubles  in  1896. 

MONETARY   SYSTEM   OF   THE    UNITED   STATES. 

In  1786  the  Congress  of  the  Confederation  chose  as  the  mone- 
tary unit  of  the  United  States  the  dollar  of  375.65  grains  of  pure 
silver.  This  unit  had  its  origin  in  the  Spanish  piaster  or  milled 
dollar,  which  constituted  the  basis  of  the  metallic  circulation  of 
the  English  colonies  in  America.  It  was  never  coined,  there  being 
at  that  time  no  mint  in  the  United  States. 

The  act  of  April  2,  1792,  established  the  first  monetary  system 
of  the  United  States.  The  bases  of  the  system  were  :  The  gold 
dollar  or  unit,  containing  24.75  grains  of  pure  gold,  and  stamped 
in  pieces  of  $10,  $5,  and  S2>4,  denominated,  respectively,  eagles, 
half  eagles,  and  quarter  eagles  ;  the  silver  dollar  or  unit,  contain- 
ing 371.25  grains  of  pure  silver.  A  mint  was  established.  The 
coinage  was  unlimited  and  there  was  no  mint  charge.     The  ratio 


69 

of  gold  to  silver  in  coinage  was  1:15.     Both  gold  and  silver  were 
legal  tender.     The  standard  was  double. 

The  act  of  1793  undervalued  gold,  which  was  therefore  ex- 
ported. The  act  of  June  28,  1834,  was  passed  to  remedy  this,  by 
changing  the  mint  ratio  between  the  metals  to  i  :  16.002.  This 
latter  act  fixed  the  weight  of  the  gold  dollar  at  25.8  grains,  but 
lowered  the  fineness  from  0.91673  to  0.899225.  The  fine  weight  of 
the  gold  dollar  was  thus  reduced  to  23.2  grains.  The  act  of  1834. 
undervalued  silver  as  that  of  1792  had  undervalued  gold,  and  silver 
was  attracted  to  Europe  by  the  more  favorable  ratio  of  i  :  isj-a- 
The  act  of  January  18,  1837,  was  passed  to  make  the  fineness  of 
the  gold  and  silver  coins  uniform.  The  legal  weight  of  the  gold 
dollar  was  fixed  at  25.8  grains,  and  its  fine  weight  at  23.  c-  grains. 
The  fineness  was,  therefore,  changed  by  this  act  to  0.900  and  the 
ratio  to  i  :  15.9884-- 

Silver  continued  to  be  exported.  The  act  of  F'ebruary  21,  1853, 
reduced  the  weight  of  the  silver  coins  of  a  denomination  less  than 
$1,  which  the  acts  of  1792  and  1837  had  made  exactly  proportional 
to  the  weight  of  the  silver  dollar,  and  provided  that  they  should 
be  legal  tender  to  the  amount  of  only  $5.  Under  the  acts  of  1792 
and  1837  they  had  been  full  legal  tender.  By  the  act  of  1853  the 
legal  weight  of  the  half  dollar  was  reduced  to  192  grains  and  that 
of  the  other  fractions  of  the  dollar  in  proportion.  The  coinage  of 
the  fractional  parts  of  the  dollar  was  reserved  to  the  Government. 

The  act  of  February  12,  1S73,  provided  that  the  unit  of  value 
of  the  United  States  should  be  the  gold  dollar  of  the  standard 
weight  of  25.8  grains,  and  that  there  should  be  coined  besides  the 
following  gold  coins  :  A  quarter  eagle,  or  2}^  dollar  piece  ;  a 
3-dollar  piece  ;  a  half  eagle,  or  5-dollar  piece  ;  an  eagle,  or  lo-dol- 
lar  piece,  and  a  double  eagle,  or  20-dollar  piece,  all  of  a  standard 
weight  proportional  to  that  of  the  dollar  piece.  These  coins  were 
made  legal  tender  in  all  payments  at  their  nominal  value  when 
not  below  the  standard  weight  and  limit  of  tolerance  provided  in 
the  act  for  the  single  piece,  and  when  reduced  in  weight  they 
should  be  legal  tender  at  a  valuation  in  proportion  to  their  actual 
weight.  The  silver  coins  provided  for  by  the  act  were  a  trade 
dollar,  a  half  dollar,  or  50-cent  piece,  a  quarter  dollar,  and  a 
lo-cent  piece  ;  the  weight  of  the  trade  dollar  to  be  420  grains 
Troy;  the  half  dollar  12;^  grams;  the  quarter  dollar  and  the 
dime,  respectively,  one-half  and  one-fifth  of  the  weight  of  the  half 
dollar.  These  silver  coins  were  made  legal  tender  at  their  nom- 
inal value  for  any  amount  not  exceeding  §5  in  any  one  payment. 


70 

The  charge  for  converting  standard  gold  bullion  into  coin  was 
fixed  at  one-fifth  of  i  per  cent.  Owners  of  silver  bullion  were 
allowed  to  deposit  it  at  any  mint  of  the  United  States  to  be  formed 
into  bars  or  into  trade  dollars,  and  no  deposit  of  silver  for  other 
coinage  was  to  be  received. 

Section  II  of  the  joint  resolution  of  July  22,  1S76,  recited  that 
the  trade  dollar  should  not  thereafter  be  legal  tender,  and  that 
the  Secretary  of  the  Treasury  should  be  authorized  to  limit  the 
coinage  of  the  same  to  an  amount  sufficient  to  meet  the  export 
demand  for  it.  The  act  of  March  3,  1887,  retired  the  trade  dollar 
and  prohibited  its  coinage.  That  of  September  26,  1890,  discon- 
tinued the  coinage  of  the  i -dollar  and  3-dollar  gold  pieces. 

The  act  of  February  28,  1878,  directed  the  coinage  of  silver 
dollars  of  the  weight  of  412;^  grains  troy,  of  standard  silver,  as 
provided  in  the  act  of  January  18,  1837,  and  that  such  coins,  with 
all  standard  silver  dollars  theretofore  coined,  should  be  legal  tender 
at  their  nominal  value  for  all  debts  and  dues,  public  and  private, 
except  where  otherwise  expressly  stipulated  in  the  contract. 

The  Secretary  of  the  Treasury  was  authorized  and  directed  by 
the  first  section  of  the  act  to  purchase  from  time  to  time  silver 
bullion  at  the  market  price  thereof,  not  less  than  $2,000,000  worth 
nor  more  than  §4,000,000  worth  per  month,  and  to  cause  the  same 
to  be  coined  monthly,  as  fast  as  purchased,  into  such  dollars.  A 
subseqiient  act,  that  of  July  14,  1890,  enacted  that  the  Secretary 
of  the  Treasury  should  purchase  silver  bullion  to  the  aggregate 
amount  of  4,500,000  ounces,  or  so  much  thereof  as  might  be 
offered,  each  month,  at  the  market  price  thereof,  not  exceeding 
$1  for  371.25  grains  of  pure  silver,  and  to  issue  in  payment  thereof 
Treasury  notes  of  the  United  States,  such  notes  to  be  redeem- 
able by  the  Government,  on  demand,  in  coin,  and  to  be  legal 
tender  in  payment  of  all  debts,  public  and  private,  except  where 
otherwise  expressly  stipulated  in  the  contract.  The  act  directed 
the  Secretary  of  the  Treasury  to  coin  each  month  2,000,000  ounces 
of  the  silver  bullion  purchased  under  the  provisions  of  the  act 
into  standard  silver  dollars  until  the  ist  day  of  July,  1891,  and 
thereafter  as  much  as  might  be  necessary,  to  provide  for  the 
redemption  of  the  Treasury  notes  issued  tuider  the  act.  The  pur- 
chasing clause  of  the  act  of  July  14,  1890,  was  repealed  by  the  act 
of  November  i,  1893. 

The  act  of  June  9,  1879,  made  the  subsidiary  silver  coins  of  the 
United  States  legal  tender  to  the  amount  of  $10.  The  minor 
coins  are  legal  tender  to  the  amount  of  25  cents. 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


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